Economy

Federal Reserve puts wheels in motion for balance sheet reduction

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The Federal Reserve at its December meeting began plans to start cutting the amount of bonds it is holding, with members saying that a reduction in the balance sheet likely will start sometime after the central bank begins raising interest rates, according to minutes released Wednesday.

While officials did not make any determination about when the Fed will start rolling off the nearly $8.3 trillion in Treasurys and mortgage-backed securities it is holding, statements out of the meeting indicated that process could begin in 2022, possibly in the next several months.

“Almost all participants agreed that it would likely be appropriate to initiate balance sheet runoff at some point after the…



Source cnbc.com

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