Fed paper sketches out slow slog to unload central bank's mortgage bonds
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Federal Reserve research indicates it may hold $600 billion in mortgage bonds by 2035; current mortgage bond holdings are $2.3 trillion, down from $2.7 trillion; Fed's balance sheet reduced from $9 trillion to $7.2 trillion since 2022; interest rates below 4% on most MBS holdings hinder refinancing; quantitative tightening (QT) aims to normalize monetary policy post-COVID-19; market expects QT to end in April; potential for active sales of mortgage bonds considered; analyst Derek Tang suggests Fed may need to sell bonds to avoid long-term holdings.
#FederalReserve #MortgageBonds #QuantitativeTightening #InterestRates #FinancialPolicy #EconomicResearch #DerekTang #Mbs #Treasuries #BalanceSheet
https://theedgemalaysia.com/node/727715
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