Central Banks
Powell Says It’ll Soon Be Appropriate to Slow Pace of QT
- Tapering meant to reduce chance of stress in funding markets
- Fed still allowing up to $95 billion of bonds roll off monthly
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The Federal Reserve is maintaining the pace at which it’s reducing bond holdings, even as officials say it will be appropriate to slow the pace of the unwind fairly soon.
The Fed has been winding down its holdings since June 2022 — a process known as quantitative tightening, or QT — and gradually increasing the combined amount of Treasury and mortgage bonds it allowed to run off, without being reinvested, to a total of $95 billion per month. That consists of $60 billion for Treasuries and $35 billion for mortgage bonds.