Tuesday, February 14, 2017

Fed Balance Sheet

Janet Yellen discussing the Federal Reserve Boards bloated balance sheet and the need to reduce holdings at a time that they find it will not hurt growth. (to paraphrase)

I am reminded of the lessons in Reminiscences. When you have a big position you have to wait for the right time to turn around. Given the size of the balance sheet I suspect they will have to wait a while longer. Buyers are disappearing from the bond market and the fiscal side is simmering.

Now is not the time.

Quote, "We will wait for greater clarity."

gh

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