The Fed could be tightening more than it realizes
Posted: Sat Nov 11, 2017 6:30 am
Business Insider - 11/11/2017 - Benn Steil and Benjamin Della Rocca, Council on Foreign Relations - Ten years ago, before the collapse of Lehman Brothers rocked global financial markets, the Fed’s balance sheet stood at $925 billion—mostly U.S. Treasuries. Ater fifty-nine months of asset purchases to push down longer-term interest rates, it had ballooned to a peak of $4.5 trillion, including nearly $1.8 trillion in mortgage securities, in October 2014. In October of this year, the Fed at last began a slow slimming-down of the balance sheet, allowing $10 billion in maturing securities to roll off without reinvesting the proceeds. All else being equal, this represents a tightening of monetary policy, as it tends to push up longer-term (10-year) market interest rates. Read more @ http://www.businessinsider.com/the-fed- ... es-2017-11