Treasury Secretary Steven Mnuchin told CNBC on Tuesday that Janet Yellen's Federal Reserve is doing the right thing by winding down its balance sheet.

In an appearance on "Squawk Box," Mnuchin said he spoke with the Fed chief on what policymakers are trying to do.

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

The Treasury secretary spoke nearly a week after the Fed provided details on how it will unwind its $4.5 trillion balance sheet, or portfolio of bonds that includes Treasurys, mortgage-backed securities and government agency debt.

In a post-meeting statement on Wednesday, the Fed said it "expects to begin implementing a balance sheet normalization process this year, provided the economy evolves broadly as anticipated."

Mnuchin also spoke about whether Congress will pass "massive" tax reform by the end of the year and gave his thoughts on Amazon's $13.7 billion deal to acquire Whole Foods.

Read more from Steven Mnuchin's interview:

Mnuchin confident that 'massive tax reform' will get done this year

Treasury Secretary Mnuchin: Amazon's Bezos had 'really good ideas' for Trump administration