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Fed eyes normalized balance sheet for good reason: US is a safe haven
Frightened by China's roller coaster equity prices and Europe's accelerating deconstruction, investors had an offer they could not refuse: America's central bankers were selling arguably the best and the safest fixed-income assets on the planet. Between December 23, 2015 and January 6, 2016, the Fed shrank its balance sheet by $248.7 billion. Judging by the strong demand for these assets, it seems that many investors did take advantage of the offer: The yield on bellwether ten-year Treasury note was driven down by 7.4 percent during the first trading week of the year. Good work. The Fed could safely allow some of the ... (full story)