The Fed minutes that shook the world

BloombergOpinion/John Authers/1-6-2022

photgraph of the seal of the Federal Reserve system“This commits the central bank to nothing, but the notion that there were hawks on the committee who thought that the Fed should reduce the size of its balance sheet (in other words, start to sell off its huge bond holdings in a move that, all else being equal, should raise yields) came as an unpleasant surprise.”

USAGOLD note: In the aftermath of the Fed’s minute release, CNBC reported the balance sheet reduction as being in the majority. Authers quotes the minutes directly as reading Some participants also noted that it could be appropriate to begin to reduce the size of the Federal Reserve‚Äôs balance sheet relatively soon after beginning to raise the federal funds rate.” Authers’ rendition seems the more plausible of the two.

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