Powell's comment that the central bank may have to start to organically grow the size of its balance sheet comes after officials said earlier this year that they were considering a new program that would allow banks to exchange Treasurys for reserves. Such a move, they hoped, would guarantee liquidity during difficult times but also would help the central bank decrease the size of its nearly $4 trillion balance sheet.


Powell's 2018 comments that the Fed's balance sheet reduction was on "autopilot" sparked a market meltdown that soured markets for much of the quarter. Since October 2017, the Fed has been allowing a set level of proceeds from Treasurys and mortgage-backed securities holdings to roll off each month.

Total capitulation.

Comments: Be the first to add a comment

add a comment | go to forum thread