In the aftermath of the FOMC statement,.....>

US TSYS: In the aftermath of the FOMC statement, Mike Schumacher at Wells Fargo

writes "that U.S. curves should gradually bear-flatten more than implied by

forwards. We expect increases in the Fed funds target rate to influence the U.S.

yield curves considerably more than changes in reinvestment policy during 2017

and early 2018."

- However, regardiing the balance sheet reduction Schumacher continues, "Balance

sheet reductions should boost 5y yields. The 2013 roadmap shows that yields

reacted most in the sectors where the Fed had been most active . This implies

that the 5y is most vulnerable to balance sheet normalization in 2017."