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| Economy |
| Fed to Unwind Balance Accumulated during Covid era |
| 2022-01-06 |
| [Investors] Minutes from the Federal Reserve's Dec. 14-15 policy meeting signaled an apparent consensus that $4.5 trillion in Covid-era asset purchases unwind at a rate of more than $50 billion per month. The Fed minutes revelation deepened stock market losses. The Dow Jones, S&P 500 and Nasdaq dived as Treasury yields rose and rate-hike odds increased... Powell indicated policymakers could make a decision in upcoming meetings. While no details were offered, he did offer stock market investors some comforting words. When it comes to the balance sheet, it's "best to take a careful, methodical approach," Powell said, adding that "Markets can be sensitive" about it. The last time the Fed shrank its balance sheet amid interest-rate hikes, the stock market had a bear-market scare in late 2018. That forced the Fed to call it off and resume balance sheet growth in 2019. |
| Posted by:Lord Garth |