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2025 Oct 29, 11:17pm
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2025 Oct 29, 11:17pm
Federal Reserve says its going to stop Quantitative Tightening on 1 December 2025. So it should keep the balance sheet at $6 trillion, recall it reached $9 trillion in 2022. It was around $4.25 trillion just before the COVID pandemic.
Maintaining the balance sheet: The Fed will stop actively shrinking its balance sheet by allowing its bond holdings to mature without being replaced. It will reinvest any principal from maturing mortgage-backed securities into Treasury bills to keep the balance sheet size stable.
Shifting portfolio composition: The reinvestment plan will gradually shift the composition of the Fed's portfolio toward shorter-dated securities, as recommended by some Fed officials.
Maintaining the balance sheet: The Fed will stop actively shrinking its balance sheet by allowing its bond holdings to mature without being replaced. It will reinvest any principal from maturing mortgage-backed securities into Treasury bills to keep the balance sheet size stable.
Shifting portfolio composition: The reinvestment plan will gradually shift the composition of the Fed's portfolio toward shorter-dated securities, as recommended by some Fed officials.
http://www.economicsvoodoo.com/quantitative-easing-0-1-2-3-and-federal-reserve-banks-love-affair-with-its-member-banks-and-mortgage-bonds-levitating-the-black-hole/
#housing