The Federal Reserve on Wednesday unveiled a long-awaited plan to stop scaling ba...
WASHINGTON - The Federal Reserve on Wednesday unveiled a long-awaited plan to stop scaling back the vast portfolio of bonds it built up to spur an economic recovery from the 2007-2009 financial crisis and recession.
By September, the U.S. central bank said its current practice of allowing up to $50 billion of Treasuries and mortgage-backed securities to roll off its balance sheet each month will come to an end if the economy evolves “about as expected.” The announcement sets an end-date to a programmatic reduction in the balance sheet that got underway in the fourth quarter of 2017, when the Fed set out to retire one of the more controversial components of the tools it used to fight the crisis.
The QE program was designed to stimulate the economy by flooding the financial system with cash and depressing long-term interest rates after the Fed had cut its benchmark short-term rate to near zero in December 2008.
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