Fed to begin shrinking balance sheet ‘relatively soon’
Rates remain on hold as FOMC eyes below-target inflation
The US Federal Reserve Board’s monetary policy statement, issued on July 26, signals that its plan to begin shrinking its balance sheet would begin “relatively soon”.
The central bank had at previous meetings said the process of balance sheet normalisation would begin “this year”, and some observers took the change in wording to mean action could begin as soon as the September meeting, when the Federal Open Market Committee (FOMC) meets next. Action remains contingent on the economy progressing
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