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IPFS News Link • Federal Reserve

Fed Considering Earlier End To Quantitative Tightening


Over the weekend, we showed the one chart that every trader should have "taped to their screen", namely Nomura's latest recap of the key Fed balance sheet roll-off dates, or those days in which there is a tangible decline in system liquidity as billions in Fed holdings of Treasurys and MBS mature, and the resultant proceeds as the Treasury repays the Fed in cold, hard cash are subsequently destroyed by the Federal Reserve which, as part of Quantiative Tightening, is now in the process of shrinking the money currently in the system.

Well, it now appears that the chart above may have to be substantially truncated, because according to a d anticipated. That is, assuming the bank's top policy makers follow through on speculation reported Friday morning by the Wall Street Journal report, the Fed might acquiesce to President Trump's demands that they "stop with the 50 Bs" - a reference to the central bank's monthly peak balance sheet runoff, which as we explained previously is really 36.2 Bs...