TYO - Fed's New Balance Sheet Plan: Get Rid Of MBS

In relationship to GDP, the balance sheet will continue to shrink until some magic unknown point is reached.

The Fed has a new plan for what to do with its balance sheet and today announced several major components of it:

• Begin tapering the "runoff" of Treasury securities in May.
• End the runoff of Treasury securities on September 30.
• Continue shedding mortgage-backed securities ((MBS)) at the current maximum of $20 billion a month, essentially until their gone.
• After September, reinvest MBS principal payments into Treasury securities.
• Chair Jerome Powell said during the press conference that the

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