The Federal Reserve has been reducing its balance sheet, although it still remains above pre-pandemic levels.
BlackRock Senior Portfolio Manager on the Global Tactical Asset Allocation team Tom Becker joins Catalysts to give insight into the Fed’s balance sheet and how what the central bank does it with it can impact the broader market.
Becker believes there may not be much of a change to the balance sheet moving forward: “I don’t think there’s an expectation that the Fed is going to rock the boat on its balance sheet portfolio from here. They made that big move in June. But you have heard some kind of rumblings about the composition of the balance sheet. So how long the duration is of the bonds that are on the portfolio, how many mortgages are on the portfolio. And so as, as we go quarter to quarter, this is definitely a slow, development that I think matters.”
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