The $85 billion of longer-term assets the Fed is buying each month provides more potential risk than benefits and the Fed should start tapering these buys, with the intention of stopping completely before year end, Federal Reserve Bank of Philadelphia President Charles Plosser said Wednesday.

Uncertainty exists as to "whether the Fed's growing presence in the market for mortgage-backed securities will distort the functioning of this market in the longer run," Plosser told the Economic Development Finance Corporation of Lancaster County, according to prepared text of his remarks released by the Fed. "But with the large volume of purchases the Fed is making, this possibility needs to remain on our radar screen."

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