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Fed Preps to Start Shrinking $4.5 Trillion Balance Sheet This Year

May 25, 2017

Via: TheStreet

The Federal Reserve may begin later this year to shrink a balance sheet that swelled to $4.5 trillion after the financial crisis, using a system of gradually increasing caps to salve concerns about how much liquidity would be pulled from markets each month.

“The caps would initially be set at low levels and then be raised every months, over a set period of time,” according to minutes of the central bank’s monetary policy committee meeting in early May.

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