Fed's Williams: Risk of Losing Money Shouldn't Deter Fed

John Williams, president of the Federal Reserve Bank of San Francisco.
Andrew Harrer | Bloomberg | Getty Images
John Williams, president of the Federal Reserve Bank of San Francisco.

Despite an increasingly large Federal Reserve balance sheet, a top official at the central bank said the fear of losing money should not stop it from providing aggressive support to the U.S. economy now.

John Williams, the Federal Reserve Bank of San Francisco's president, said the bank's "primary" concern should be what aids the economy now rather than sidestepping the risk of losing down in the future.

The statement comes two days after the Federal Open Market Committee, the Fed's policy-setting board, released minutes of its January meeting, which said "many participants" expressed concerns about "potential costs and risks arising from further asset purchases."

Since its pre-crisis level of about $800 billion, the Fed's balance sheet has ballooned to approximately $3 trillion now, an expansion that has prompted concerns over the potential risks and calls for a drawdown.

But Williams said the risk "in no way hinders or interferes with us conducting monetary policy" since the central bank can contain the losses on its own books and pay for them once profits come back.

In a separate interview on CNBC, St. Louis Fed President James Bullard said the Fed's "very aggressive" easy money policy is going to stay that way for a "long time."

"It's true that the committee is thinking about how are we going to handle this later this year," Bullard added. "But that's a natural thing for the committee to be talking about."