Right side of balance sheet

Right side of balance sheet”

The weakness among treasuries came after the Fed left interest rates unchanged as widely expected but signaled another rate hike is likely this year.

Reducing the size of the Fed's balance sheet will mean reducing the quantity of reserves in the financial system.

The reductions will begin in October with a target of $10 billion a month - comprised of about $6 billion in Treasury bonds and $4 billion in mortgage bonds - and that will increase to $50 billion a month in 2018. This approach suggests that tapering will occur at a glacial pace. Hopefully, the Fed won't do anything drastic that could spook the bond market. U.S. Fed chair Janet Yellen aims to avoid a similar financial outpouring. A new board composition could accelerate changes in policy and have unintended effects on markets.

China's markets were already closed by the time it came but it kept the pressure on metals and emerging markets stocks which were already down after the Fed meeting and as Russian Federation was forced to bail out one of its large banks.

While this is welcome added clarity on the Fed's intentions, they have once again missed an opportunity to offer a comprehensive strategy for conducting monetary policy.

In summary, despite the visible current hawkish position of the Fed, which helped Dollars yesterday, and may continue to do so in the near future, the long-term outlook for the US currency for the next 3-6 years is clearly worse than that of its competitors due to the understanding that the Central Bank is unlikely to raise interest rates as much as in previous cycles of monetary tightening.

The Fed will hike as gross domestic product (GDP) growth and inflation allow in order to create a cushion in the event the economy rolls over. The big question that forex market participants will be waiting to be answered is with respect to the Fed board's forecasts for future rate increases (the "dot plot") and the assessment of economic conditions - together with fresh forecasts about growth, inflation and unemployment.

August's year-on-year inflation increase of 1.9% is progressing toward the Fed's goal of 2%. There was a chance that the Fed would appear more dovish with respect to the prospects for tightening in 2018 and 2019 but would likely stay the course for a December hike. Gold prices fell as the USA dollar rose after the FOMC meeting. Some economists worry such a vast lake of bonds is distorting the market and is in danger of distorting it more if it gets out suddenly. For each rate hike since the crisis, the Fed has needed to raise the IOER rate as well in order to have a commensurate rise in the policy rate. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by almost a basis point at 2.234%. No forecasts can be guaranteed. There is no guarantee that the information supplied is accurate, complete, or timely, nor are there any warranties with regards to the results obtained from its use.

Like this


22 September 2017
Knights add 6th home came, will host Austin Peay on October 2
They could if they scheduled a game for Saturday, Dec. 2 and also did not qualify for the American Football Championship Game. Austin Peay will play a third FBS opponent this season after the Governors added an October 28 visit to UCF on Thursday.

22 September 2017
Pak concerned over Trump calling for greater role for India in Afghanistan
Ghani noted that many US soldiers had made the "ultimate sacrifice", which he said "can now result in a stable Afghanistan". Pakistan has also threatened that the U.S. move would drive it closer to China, and decrease United States leverage.

22 September 2017
Jeff Sessions warns gang members: 'We will hunt you down'
Sessions says gang members are exploiting the unaccompanied minor program to come to the "wolves in sheep clothing".

22 September 2017
Fowler's three hits lead Cardinals to sweep of Cincinnati
That included a Molander double in the seventh that scored Martinez and a play where Molina scored after Wong grounded out. Cincinnati tied the score 1-1 in the second when Jesse Winker doubled and later scored from third on a wild pitch.

22 September 2017
President Trump to visit Puerto Rico
The island is facing flooding and unique difficulties with recovery in the coming days, according to The New York Times . Perez had hoped to raise money to buy uniforms, backpacks and school supplies for 100 children in Puerto Rico.

22 September 2017
Analysts See $1.82 EPS for United Continental Holdings Inc (UAL)
Guardian Life Ins Com Of America holds 0.01% of its portfolio in United Continental Holdings Inc (NYSE:UAL) for 642 shares. Norinchukin Bank & Trust The has 0.07% invested in United Continental Holdings Inc (NYSE:UAL) for 43,548 shares.

22 September 2017
Niall Horan releases music video for "To Much To Ask"
The song is about Niall hoping that his love will come back to him, as he sings "That's all I'm asking/Is it too much to ask? ". Tickets for the North American leg of Niall's Flicker World Tour 2018 go sale Friday at 10 a.m. local time.

22 September 2017
'I cocked it and I shot': Gas station worker shoots robbery suspect
When asked why she didn't follow the company's protocol, Wertz replied: "I'm sick and exhausted of being a sitting duck". The suspected robber, identified as 23-year-old Ferron Mendez, was taken to the hospital in critical condition.

22 September 2017
Matthew Vaughn meant to create a young Wolverine
Matthew Vaughn originally meant to introduce a young Wolverine character in "X-Men: First Class ". His idea? A prequel story that would've introduced a younger Wolverine and another new character.

22 September 2017
Indiana GOP says President Trump visiting state next week
The president is expected to bring members of a Congressional delegation and hold an event at a business. White House aides say they're still working out exact details, including where he'll speak.