FOMC Minutes: Balance Sheet To Shrink This Year; Some Saw Stock Prices As “Quite High”

As previewed, the focus on the just released Fed minutes was on two things: the path of the rate hike, which the Fed said it can change its assessment if warranted, and on the future of the Fed’s balance sheet, where the FOMC said said a reinvestment shift was warranted, suggesting that a balance sheet reduction would likely begin later this year.
MOST FED OFFICIALS SAW REINVESTMENT SHIFT WARRANTED LATER IN YR FED: BOTH TREASURIES, MBS SHOULD BE PART OF REINVESTMENT CHANGE FED OFFICIALS READY TO CHANGE RATE-PATH ASSESSMENT IF WARRANTED FOMC TO CONTINUE DISCUSSING REINVESTMENT SHIFT AT UPCOMING MTGS FOMC OFFICIALS DIVIDED OVER LEVEL OF SLACK IN LABOR MARKET Key excerpts:
“Provided that the economy continued to perform about as expected, most participants anticipated that gradual increases in the federal funds rate would continue and judged that a change to the Committee’s reinvestment policy would likely be appropriate later this year.”

This post was published at Zero Hedge on Apr 5, 2017.