Federal Reserve: Will End the Reduction of Its $6.6 Trillion Balance Sheet

ChainCatcher news, the Federal Reserve announced on Wednesday that it will end the reduction of its $6.6 trillion balance sheet, as there is evidence that liquidity conditions in the money market have begun to tighten and bank reserve levels are declining.

The Federal Reserve stated that starting from December 1, it will seek to stabilize its holdings of Treasury securities by rolling over maturing Treasuries, rather than allowing up to $5 billion of Treasuries to run off each month. The Fed also said it will maintain its current plan to allow up to $35 billion of mortgage-backed securities to mature each month—a target that has not been reached in more than three years—but starting December 1, it will reinvest all principal payments from maturing mortgage-backed securities into U.S. Treasuries.