Balance Sheet Normalization Principles and Plans | Forex Factory

  • Balance Sheet Normalization Principles and Plans

    From federalreserve.gov

    In light of its discussions at previous meetings and the progress in normalizing the size of the Federal Reserve's securities holdings and the level of reserves in the banking system, all participants agreed that it is appropriate at this time for the Committee to provide additional information regarding its plans for the size of its securities holdings and the transition to the longer-run operating regime. At its January meeting, the Committee stated that it intends to continue to implement monetary policy in a regime in which an ample supply of reserves ensures that control over the level of the federal funds rate ... (full story)

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swing77
Mar 20, 2019 1:15pm
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#xauusd
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romstreets
Mar 20, 2019 1:53pm
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Quoting foto
Have no idea if anyone actually reads this stuff before they trade, but here Fed is moving into Treasuries at expense of MBS so this means Fed is moving out of supporting mortgage market. Certainly not a supportive statement for commodity currencies and Housing. add: at face value this is actually Hawkish as Fed is going back to its traditional holdings of Treasuries which is not what market was expecting. Yes they are slowing the rate of redemption but also changing the mix.
Going back into Treasuries, good for energy, reits and utilities related sector right? bad for financials, materials and consumer staples?
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ocd
Mar 20, 2019 1:41pm
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Quoting swing77
#xauusd
Yep
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foto
Mar 20, 2019 1:22pm
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Have no idea if anyone actually reads this stuff before they trade, but here Fed is moving into Treasuries at expense of MBS so this means Fed is moving out of supporting mortgage market.
Certainly not a supportive statement for commodity currencies and Housing.

add: at face value this is actually Hawkish as Fed is going back to its traditional holdings of Treasuries which is not what market was expecting. Yes they are slowing the rate of redemption but also changing the mix.
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foto
Mar 20, 2019 2:05pm
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Quoting romstreets
{quote} Going back into Treasuries, good for energy, reits and utilities related sector right? bad for financials, materials and consumer staples?
Just seems Fed has not really changed direction they are getting out of direct support of economy. I see your point on Utilities as that is about yield not sure agree with your take on energy and reits.
This should be a fade on current market action related USD.
Powell is not delivering dirty dishwater as Draghi did.

I am over weighted on long USD/commodities not going to change that mix
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