Federal Reserve Bank of Cleveland President Beth Hammack said slowing the pace of the US central bank’s balance-sheet reduction may allow officials to continue the runoff for longer, while emphasizing there are costs to holding a portfolio that is larger than necessary.

The Fed slowed the pace of its balance-sheet runoff at its March policy meeting, a move that can work to lower long-term bond yields and led some watchers of the central bank to speculate that policym