[Video] Mnuchin voices support for decreasing Fed balance sheet

But says Fed decision is independent

During an interview with CNBC on Tuesday, Department of the Treasury Secretary Steven Mnuchin voiced his support for the Federal Reserve's recently announced plan to decrease its balance sheet.

Mnuchin explained that he believed increasing the balance sheet was something the Federal Reserve needed to do in the wake of the financial crisis, but said now the time has come to reverse that, according to an article by Berkeley Lovelace Jr. for CNBC.

“We think it's the right thing for them to get out of their large portfolio,” Mnuchin said. “It was something that they did in a unique period of time and obviously, it has to be reversed.”

However, he also clarified that, regardless of his opinion, the Fed operates independently of political parties and their viewpoints.

Here is the interview:

Tucked into the May Federal Open Market Committee meeting minutes, the Fed revealed its plan to start to unwind the $4.5 trillion portfolio of bonds, which the June announcement expanded on.

“The Fed will begin to reduce the securities held on its balance sheet later this year, limiting the amount of securities that will be allowed to run-off each month. With lower caps for mortgage-backed securities compared to Treasuries, it is possible that there will be less widening in mortgage spreads than previously estimated,” said Mike Fratantoni, Mortgage Bankers Association chief economist.

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