Fed minutes shed light on balance sheet shrinkage plan
System of caps would allow gradual reductions in the reinvestment of securities held under the QE programme
The Federal Reserve has revealed details of how it is likely to shrink its balance sheet, outlining a system of gradually increasing caps on reinvestment in the minutes of the latest Federal Open Market Committee (FOMC) meeting.
Published on May 24, the minutes say “nearly all” policymakers saw merit in the proposals, put to the committee by Fed staff. Under the plans, the amount reinvested would be reduced every three months by a predetermined cap, which would gradually rise up to an agreed
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