what's next for Fed

Discussion in 'Economics' started by olias, Mar 17, 2011.

  1. olias


    "(Reuters) - If it's QE2 and through, will the Federal Reserve soon start letting the air out of its balance sheet balloon as well?

    The Fed's improved view of the U.S. recovery and heightened vigilance on inflation suggest it will wrap up its monetary easing once it completes its $600 billion bond buying program -- dubbed QE2 because it is the second round of quantitative easing -- at mid-year.

    The next important decision for the U.S. central bank is whether to hold the size of its $2.5 trillion balance sheet steady by reinvesting securities as they mature or are paid off, or do nothing, allowing the balance sheet to shrink of its own accord..."

    continued: http://www.reuters.com/article/2011/03/17/us-usa-fed-portfolio-idUSTRE72G43920110317