Reuters
Analysis-Fed’s bond-buying program may be on the way out, but it’s not going far
The Federal Reserve will start to shutter its pandemic-era bond-buying program later this year, leaving the U.S. central bank with a balance sheet of more than $8.5 trillion before the purchases end in mid-2022 and a likely debate coming about what to do different next time. The quick answer may be nothing: By roughly doubling the size of its securities holdings since the start of the pandemic in early 2020, the Fed helped stabilize financial markets, used its ongoing purchases to signal it would battle the economic crisis for as long as necessary, and has now planned its wind-down with no market “tantrum.” Fed Chair Jerome Powell, speaking to reporters on Wednesday after the end of a two-day policy meeting, said the central bank would start paring its $120 billion in monthly asset purchases “soon” and end them by the middle of next year.
