As Fed’s QE era ends, a new trillion dollar bond dilemma emerges

Bloomberg/Liz McCormick and Alex Harris/3-15-2019

“While Fed officials have made it clear they want to go back to owning mostly Treasuries, as they did before the financial crisis, it’s unclear how the central bank will get there or what it will buy. Its current policy, replacing mortgage bonds only when they mature, could take a decade or more. That’s led some to advocate outright sales, which the Fed has never done.”

USAGOLD note: This article raises some interesting questions on future Fed policy with respect to unwinding, or not unwinding, the deep pool on the asset side of its balance sheet.

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