FEDERAL RESERVE/TREASURY: “The Federal Reserve, which holds more bonds than any other investor, is planning how to shed some of them starting this year. And no one is too worried about it.
The Fed is expected to announce in the near future a plan to gradually reduce its $4.5 trillion portfolio of Treasuries and mortgage-backed securities, the final step necessary to conclude the stimulus campaign it conducted after the financial crisis.
The unveiling could come Wednesday, after a two-day meeting of the Fed’s policy-making committee, when the Fed is expected to announce it will raise its benchmark interest rate by a quarter point, to a range between 1 percent and 1.25 percent.
Financial markets have watched the Fed’s preparations with equanimity. There is no sign of the panic that briefly gripped investors when the Fed contemplated similar measures in 2013, perhaps because the economy seems to be considerably stronger.”
-Binyamin Applebaum, “Markets Unfazed as Federal Reserve Nears Plan to Shed Bonds,” The New York Times online, June 12, 2017