- At the height of the pandemic, the Fed pumped trillions of dollars into the financial system through asset purchases to support markets and the broader economy.
- The Fed has several options for unwinding its portfolio.
- While we think investors will hear a lot about the Fed balance sheet in the coming months, it will be more important to focus on what the Fed is saying about the Fed funds rate, which would have the most direct impact on fixed-income assets.
For further details see:
Demystifying Fed Speak: How Shrinking The Balance Sheet Could (Not) Impact Markets