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The Fed’s plan to start shrinking its balance sheet could have unforeseen consequences





Fed balance sheet BI

  • The Fed is expected to soon start shrinking its balance sheet after massive purchases of financial assets during and after the Great Recession.
  • However, uncertainty around the timing and pace of the wind-down could hurt credit markets and the economy.

The Federal Reserve is trying to have its cake and it eat it too when it comes to its controversial balance sheet policies — and it’s bound to end in indigestion.

Policymakers have touted their use of large-scale bond purchases during the Great Recession and the anemic recovery that followed, also known as quantitative easing or QE, as having helped to prevent a read more >>>

Source:: BusinessInsider.Com

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