Fed Prepares to Cut $4.5 Trillion Portfolio: What It Means – TheTradingReport

The Fed has begun to pave the way toward cutting its balance sheet, which grew from about $1 trillion to $4.5 trillion in five years. The large increase is the result of an aggressive bond-buying stimulus program known as quantitative easing. The program was implemented to keep interest rates low and support a collapsed housing market. Since December 2015, the Fed has gradually raised the benchmark fed funds rate from near zero amid an improved labor market and U.S. economy. But its large portfolio of Treasury bonds and mortgage-backed securities has remained in place.

With officials phasing out its crisis-era monetary policies, the Fed is now discussing a timeline to start winding down its portfolio to about half its current size.

hnttp://www.thetradingreport.com/2017/07/12/fed-prepares-to-cut-4-5-trillion-portfolio-what-it-means/

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