FED/FEDERAL RESERVE: “Federal Reserve officials in June readied plans to start slowly shrinking the central bank’s large portfolio of bonds and other assets in the next few months, and the debate since then over when to launch the plan has increasingly pointed to September.
Several officials said the Fed had sufficiently prepared markets to initiate the run-off ‘within a couple of months,’ according to the minutes of the central bank’s June meeting released on Wednesday [7-5-17]. Some others said waiting longer could them give more time to figure out why inflation has slowed and that moving sooner might wrongly signal they were moving more aggressively to raise interest rates.
Taken together, the minutes of the June meeting and subsequent comments from Fed officials show a growing likelihood that the Fed will initiate its balance sheet runoff plan in September. That sequence would give officials more time to see if the inflation slowdown is temporary before raising rates, and it would allow officials to proceed well before any transition to a new Fed leader if Chairwoman Janet Yellen isn’t reappointed before her current term ends Feb. 3.”
-Nick Timiraos, “Fed Officials Ready to Start Shrinking Portfolio in Months,” The Wall Street Journal online, July 5, 2017 08:17pm