THE FOMC DECIDES TO HIKE RATES TO REDUCE BALANCE SHEET!!!!!!!!!!!!!!!!!!!

By: Economy & Finance Report

The Federal Open Market Committee, voted internally to raise interest rates (from 1.00%-1.25%).  The Fed is trying to unwind the $4.5 trillion dollar balance sheet that is on the government books. The Fed will be reducing it treasuries and other securities, in order to reduce the Fed’s principal amount.

The reduction of the balance sheet will take time, but will eventually ease the debt that has accrued on the Fed’s watch. The reduction will affect the balance sheet of banks capital reserves The Federal Reserve balance sheet has risen dramatically, starting when much of the accrual happening during the 2008 financial crisis. -SB

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