FYI: Markets have cheered the Federal Reserve’s imminent announcement that it will stop shrinking its asset portfolio later this year, but determining that date is just one challenge facing central-bank officials.
Now, they are turning to the arguably more sensitive task of determining the composition of the Treasury securities the central bank will hold.
Specifically, they need to decide the right combination of Treasurys of varying duration to hold—whether mostly short-term bills or a mix that also includes more longer-term notes and bonds. This composition will be a matter of intense interest to the markets for those securities, with implications for the economy and monetary policy.
Regards,
Ted
https://www.wsj.com/articles/fed-faces-crucial-decision-on-mix-of-treasurys-in-its-portfolio-11552987920
