Relevant:
- Yellen: Fed balance sheet to take years to shrink
- Is the Fed Getting Cold Feet about the QE Unwind?
- The Fed Balance Sheet Unwind Myth - Fed Sees Swoon Dead-Ahead?
- The dynamic central banking duo -- ECB balance sheet up over €3.1 trillion mimicking Fed balance that is close to $3 trillion. Shuffling toxic assets into darkness.
- Sloth-like Fed Shrinks Balance Sheet By 0.14% Or $6 Billion (Will Take 700 Weeks or 13.46 Years To Unwind)
2017-05-25 — nasdaq.com
...
The Fed also moved toward a consensus on a proposal to gradually unwind the massive balance sheet built up over the course of the asset buying program that was the core of Fed's quantitative strategy... But the Fed does not want to reduce the massive $4.5 trillion balance sheet at one go. Rather, it plans to let it shrink as the securities mature. The Fed officials did agree to end the reinvestment of principal of maturing securities in slow but increasing stages. Such an approach will stay on auto-pilot, until and unless there is major deterioration in the domestic economic front.
Even a maturation-based unwind is going to be a lot for the market to swallow... it has become dependent upon the Fed soaking up a huge amount of issuance in the last 9 years...
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