A senior official at the Federal Reserve Bank of New York said the Fed's balance sheet reduction was progressing smoothly and not causing major disruptions to markets, though the central bank would continue to monitor risks closely. "Our implementation framework has recently undergone multiple stress tests and performed well," said Roberto Perli, manager of the Fed's System Open Market Account (SOMA), which oversees the Fed's portfolio. "This is very encouraging, but we still recognize that there are risks and uncertainties ahead," Perli said.