The Federal Reserve on Wednesday said it will stop shrinking its Treasury holdings beginning Dec. 1, ending a three-year long effort after stress signals in money markets intensified in recent days.
The central bank said it will stop unwinding Treasury holdings, currently at a pace of $5 billion a month, but will continue the runoff of its portfolio of mortgage-backed securities by about $35 billion a month. It will reinvest the proceeds in Treasury bills, in line with its goal to return to a portfolio consisting primarily of Treasuries, Chair Jerome Powell said at a press conference after the policy decision.
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