vrijdag 16 juni 2017

Janet Yellen Starts Tightening

In a previous article, I wrote about the possibility of reverse quantitative easing (QE) later this year. That possibility has started to become reality as the Federal Reserve laid out its plans to normalize its balance sheet this year, which was unexpected.

At the FOMC meeting on June 14, 2017, Janet Yellen disclosed its intention to reduce the Fed's $4.5 trillion balance sheet, comprised of $2.5 trillion in Treasury bonds and $2 trillion in mortgage-backed securities (MBS).  The chart below shows how this normalization will look like.

To read further, go here.

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