Yellen: Fed asset holdings provide automatic policy tightening

Federal Reserve chair Janet Yellen
Janet Yellen: Fed asset holding provides “passive” tightening

The US Federal Reserve's large holdings of assets, bought under quantitative easing, are starting to provide a form of "passive" policy tightening, Janet Yellen said on January 19.

Warning her audience it would be unwise to follow the steeper path for interest rate hikes implied by some monetary policy rules, the Fed chair said the effects on long-run rates already amount to tightening.

The downward pressure on the longer end of the yield curve remains significant, but will diminish as the

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