Central Banks
Citi Sees Fed’s Balance-Sheet Runoff Extending Into 2025
- Prior estimate was for end-2024, which is Street consensus
- Fed likely wants to shrink balance sheet as much as possible
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The Federal Reserve may continue its program to shrink its balance sheet until the second quarter of 2025, barring a recession, longer than an earlier projection, according to Citigroup Inc.
The central bank has been winding down its holdings since June 2022, through a process known as quantitative tightening. Last week it said it would slow the pace at which it lets Treasuries roll off every month, a move meant in part to ease potential strains on funding markets.