原文标题：
Fed Officials Weigh Shrinking Balance Sheet by $95 Billion/Month
原文连结：https://ibit.ly/5eKZ
发布时间：2022/04/07 02:00+8
原文内容：
Fed Officials Weigh Shrinking Balance Sheet by $95 Billion/Month
- Caps could be phased in over three months or bit longer
- Many officials saw one or more half-point hikes going forward
The Federal Reserve signaled it will reduce its massive bond holdings at a
maximum pace of $95 billion a month, further tightening credit across the
economy as the central bank raises interest rates to cool the hottest
inflation in four decades.
Minutes of their March meeting released Wednesday also showed that “many”
officials viewed one or more half-percentage-point rate increases could be
appropriate going forward if price pressures fail to moderate.
They proposed shrinking the Fed’s balance sheet at a maximum monthly pace of
$60 billion in Treasuries and $35 billion in mortgage-backed securities,
which compares with the peak rate of $50 billion a month the last time the
Fed trimmed its balance sheet from 2017 to 2019.
“Participants generally agreed that monthly caps of about $60 billion for
Treasury securities and about $35 billion for agency MBS would likely be
appropriate,” the Fed said in minutes of the March 15-16 Federal Open Market
Committee meeting. “Participants also generally agreed that the caps could
be phased in over a period of three months or modestly longer if market
conditions warrant.”
May Meeting
The FOMC is expected to approve the balance-sheet reduction at its next
gathering May 3-4. The roadmap for shrinking the balance sheet came via a
staff presentation to officials.
“Participants agreed they had made substantial progress on the plan and that
the Committee was well placed to begin the process of reducing the size of
the balance sheet as early as after the conclusion of its upcoming meeting in
May,” the minutes showed.
Long-term Treasury yields oscillated, with the gap between 2- and 10-year
yields extending a steepening move on the day. Meanwhile the S&P 500 index
pared losses.
The move to reduce the balance sheet will extend a sharp pivot toward
fighting inflation, as the Fed was buying bonds as recently as last month as
it attempted a smooth wind-down of pandemic support.
U.S. central bankers raised interest rates by a quarter percentage point at
the March meeting, lifting them from near zero where they had been held since
March 2020 as the pandemic spread. They signaled a further six such moves
this year to cool the hottest inflation in four decades. Shrinking the size
of their balance sheet, which ballooned to $8.9 trillion as they aggressively
bought bonds to shield the economy from Covid-19, will also help to tighten
financial conditions.
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“Many participants noted that