3 ms·
It's an overnight transaction, it should go away very quickly. The Fed has been surprisingly consistent in its reduction of QE [1]. There is no way QE will be
by cm2187 7y ago
It's an overnight transaction, it should go away very quickly.
The Fed has been surprisingly consistent in its reduction of QE [1]. There is no way QE will be drained by the next recession but what is interesting is that they keep draining even though they are considering lowering rates. I am surprised it doesn't have a bigger impact on the market given how large of an impact QE had on the way up.
[1] https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm https://www.federalreserve.gov/monetarypolicy/bst_recenttren...
- wnissen 7y agoI suppose it's not something that the Fed would want trumpeted in every paper, but thanks for informing me that they were reversing QE. I agree, you would think that the effects of selling off a half trillion in assets per year since the beginning of last year would be much more substantial. Didn't they buy up a whole bunch of mortgages?
- cm2187 7y agoI believe their balance sheet is about 50/50 between treasuries and mortgages, and that they are selling both.
- somebodythere 7y agoBalance sheet runoff is over: https://www.cnbc.com/2019/03/20/fed-sets-end-of-balance-sheet-reduction-for-september.html https://www.cnbc.com/2019/03/20/fed-sets-end-of-balance-shee...