Fed to Shrink Balance Sheet at Slower Pace Until Debt-Ceiling Deal Reached

The Federal Reserve said it will start shrinking its balance sheet at a slower pace starting next month, reducing the amount of bond holdings it lets roll off every month.

Officials, who left interest rates unchanged on Wednesday, said they’ll lower the cap starting April 1 on the amount of Treasuries allowed to mature without being reinvested to $5 billion from $25 billion. The Fed will leave the cap on mortgage-backed securities unchanged at $35 billion.