April FOMC Reaction from NatWest Markets, who...>

FED: April FOMC Reaction from NatWest Markets, who had thought going into the

meeting that the Fed could announce a set schedule for a more regular QE

program. This would have represented a shift from their Tsy buying to date which

has been primarily focused on improving liquidity.

- NatWest still thinks that the Fed will end up reducing Tsy purchases to

~$100bln a month (versus this week's pace which implies monthly pace of

~$210bln).

- But the path to that level will likely be slower and smoother than a shift

change starting in May. Fed to taper weekly purchases to $40bln next week,

followed by ~$5-10bln increment declines each week until we reach a rate of

$25bln per week.

- Fed will generally purchase Treasury securities in a pattern similar to their

to-date post-COVID QE (C-QE) purchases.