MNI BRIEF: Fed Estimates Balance Sheet Could Reach $9T by 2023

The Federal Reserve's monthly bond buys could lead the central bank's portfolio to grow to USD9.0 trillion by the end of 2022, according to projections released by the New York Fed Monday.

The annual report's forecasts assume that the central bank will continue buying bonds at the current pace of USD120 billion a month through the end of 2021, and that purchases will slowly decline to zero by the end of 2022. The report also assumes that the reinvestment phase, during which principal payments on Treasury securities and agency MBS are reinvested fully into Treasury securities and agency MBS, ends in the fourth quarter of 2025.

Philadelphia Fed President Patrick Harker on Friday joined the still-minority view that QE taper talks should begin sooner than later, and some have stressed that Fed Chair Jay Powell should be the one to open those discussions when appropriate.