Fed has maneuvering room on how to slim balance sheet: Fischer

TORONTO (Reuters) – The Federal Reserve wants to get back to holding just Treasury securities on its balance sheet, but has retained some “maneuvering room” on how exactly it will get there, a top Fed official said on Monday.

The U.S. central bank added trillions of dollars in mortgage-backed securities to its holdings after the financial crisis in an effort to push down long-term borrowing costs and encourage spending and investing. The Fed has signalied it likely will allow those securities to run off as they mature, and only after it begins to raise rates.

“We’re going up with the interest rate, then along, then another little jump,” Fed Vice Chair Stanley Fischer said after a speech here. “During that process we’ll decide at what rate to get rid of the mortgage backed securities.”

(Reporting Andrea Hopkins, writing by Ann Saphir; Editing by Chizu Nomiyama)