Economics
Fed Officials Leaning Toward Bigger Is Better on Balance Sheet
- New tools keep fed funds rate less volatile than prior regime
- Central bankers still intent on some reduction over time
Srinivasan: Reasonable to Assume Two 2017 Fed Hikes
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While nearly all eyes are on the Federal Reserve’s likely decision to raise short-term interest rates next week, investors in the world’s biggest debt market say central bankers have already signaled a major change in another policy tool.
Fed officials have indicated they may make their super-sized balance sheet of bond holdings and $2 trillion in excess reserves created during the last financial crisis a more permanent feature of the way they interact with financial markets.