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MNI: Fed To Aim For USD95B Cap To Shrink Balance Sheet

(MNI) Washington
WASHINGTON (MNI)

Fed minutes were released on Wednesday.

The Federal Reserve will begin rapidly shrinking its USD8.9 trillion balance sheet starting as early as May as part of a broader tightening campaign that has officials considering one or more 50BP rate hikes this year, minutes from the central bank's March meeting showed.

"Participants generally agreed that monthly caps of about $60 billion for Treasury securities and about $35 billion for agency MBS would likely be appropriate. Participants also generally agreed that the caps could be phased in over a period of three months or modestly longer if market conditions warrant," the March FOMC minutes said.

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The Federal Reserve will begin rapidly shrinking its USD8.9 trillion balance sheet starting as early as May as part of a broader tightening campaign that has officials considering one or more 50BP rate hikes this year, minutes from the central bank's March meeting showed.

"Participants generally agreed that monthly caps of about $60 billion for Treasury securities and about $35 billion for agency MBS would likely be appropriate. Participants also generally agreed that the caps could be phased in over a period of three months or modestly longer if market conditions warrant," the March FOMC minutes said.

Keep reading...Show less