-
Policy
Policy
Exclusive interviews with leading policymakers that convey the true policy message that impacts markets.
LATEST FROM POLICY: -
EM Policy
EM Policy
Exclusive interviews with leading policymakers that convey the true policy message that impacts markets.
LATEST FROM EM POLICY: -
G10 Markets
G10 Markets
Real-time insight on key fixed income and fx markets.
Launch MNI PodcastsFixed IncomeFI Markets AnalysisCentral Bank PreviewsFI PiFixed Income Technical AnalysisUS$ Credit Supply PipelineGilt Week AheadGlobal IssuanceEurozoneUKUSDeep DiveGlobal Issuance CalendarsEZ/UK Bond Auction CalendarEZ/UK T-bill Auction CalendarUS Treasury Auction CalendarPolitical RiskMNI Political Risk AnalysisMNI Political Risk - US Daily BriefMNI Political Risk - The week AheadElection Previews -
Emerging Markets
Emerging Markets
Real-time insight of emerging markets in CEMEA, Asia and LatAm region
-
Commodities
-
Credit
Credit
Real time insight of credit markets
-
Data
-
Global Macro
Global Macro
Actionable insight on monetary policy, balance sheet and inflation with focus on global issuance. Analysis on key political risk impacting the global markets.
Global MacroDM Central Bank PreviewsDM Central Bank ReviewsEM Central Bank PreviewsEM Central Bank ReviewsBalance Sheet AnalysisData AnalysisEurozone DataUK DataUS DataAPAC DataInflation InsightEmployment InsightGlobal IssuanceEurozoneUKUSDeep DiveGlobal Issuance Calendars EZ/UK Bond Auction Calendar EZ/UK T-bill Auction Calendar US Treasury Auction Calendar Global Macro Weekly -
About Us
To read the full story
Sign up now for free trial access to this content.
Please enter your details below.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Real-time Actionable Insight
Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.
Free AccessMNI: Mester Backs Reducing Fed Balance Sheet 'Soon', MBS Sales
Cleveland Federal Reserve President Loretta Mester said Thursday she wants to start shrinking the central bank's USD8.9 trillion balance sheet soon, and foresaw a faster pace of rate hikes for the U.S. economy than seen in the last rate-hiking cycle started in 2015.
"Barring a material change in the economy, I anticipate that it will be appropriate to move the funds rate up at a faster pace this time and to begin reducing the size of the balance sheet soon and more quickly than last time," she said in prepared remarks. "In terms of the balance sheet, I would also support selling some of our mortgage-backed securities at some point during the reduction process, something we did not do last time."
Sales would help to speed the return of our portfolio’s composition to primarily Treasury securities, which would minimize the effect of the balance-sheet holdings on the allocation of credit across economic sectors, one of the FOMC’s principles for reducing the size of our balance sheet, she said.
Other Fed officials, including James Bullard of St. Louis and Esther George of Kansas City, have publicly shown support for asset sales off the central bank's balance sheet. The FOMC's January meeting minutes released Wednesday showed "many participants" said it might be appropriate "at some point in the future" to sell MBS. The Fed has USD2.7 trillion of MBS on its balance sheet.
The task before the Fed is to remove accommodation at the pace necessary to bring inflation under control while sustaining the expansion in economic activity and healthy labor markets, she said, noting it appropriate to move the funds rate up in March and "follow with further increases in the coming months."
The Cleveland Fed President also repeated that if inflation does not moderate as expected by mid-year then she would support more rate hikes over the second half of the year. "On the other hand, if inflation moves down faster than expected, then the pace of removal could be slower in the second half of the year than in the first half. So, the pace at which monetary policy accommodation is removed will need to be data driven and forward looking."
To read the full story
Sign up now for free trial access to this content.
Please enter your details below.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.