{"id":27396,"date":"2017-10-29T09:44:59","date_gmt":"2017-10-29T14:44:59","guid":{"rendered":"http:\/\/olduvai.ca\/?p=27396"},"modified":"2017-10-29T09:44:59","modified_gmt":"2017-10-29T14:44:59","slug":"federal-reserve-hesitates-on-qe-unwind-balance-sheet-reduction","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=27396","title":{"rendered":"Federal Reserve Hesitates on QE Unwind \/ Balance Sheet Reduction"},"content":{"rendered":"<h3 class=\"post_title\"><a href=\"http:\/\/thegreatrecession.info\/blog\/fed-balance-sheet-reduction\/\">Federal Reserve Hesitates on QE Unwind \/ Balance Sheet Reduction<\/a><\/h3>\n<div class=\"singlepost entry\"><img loading=\"lazy\" decoding=\"async\" class=\"attachment-single-post-thumbnail size-single-post-thumbnail wp-post-image\" src=\"http:\/\/thegreatrecession.info\/blog\/wp-content\/uploads\/JanetYellen.jpg\" sizes=\"auto, (max-width: 202px) 100vw, 202px\" srcset=\"http:\/\/thegreatrecession.info\/blog\/wp-content\/uploads\/JanetYellen.jpg 202w, http:\/\/thegreatrecession.info\/blog\/wp-content\/uploads\/JanetYellen-136x150.jpg 136w\" alt=\"Federal Reserve balance sheet reduction not happening yet even as the Fed applauds its own success\" width=\"202\" height=\"222\" \/>Is the Federal Reserve\u2019s Great Unwind already coming unwound? I thought it would be good to check up on Federal Reserve balance sheet reduction since the Fed is supposed to be up and running on the move out of <a href=\"http:\/\/thegreatrecession.info\/blog\/an-idiots-guide-to-quantitative-easing-what-is-quantitative-easing-is-qe3-a-looming-apocalypse\/\">quantitative easing<\/a> this month. It should be fascinating to see what progress the Fed is making as it happily applauds its own successful recovery.<span id=\"more-79662\"><\/span><\/p>\n<p><strong>The Federal Reserve balance sheet reduction that didn\u2019t happen<\/strong><\/p>\n<div id=\"attachment_75842\" class=\"wp-caption alignleft\"><a href=\"http:\/\/thegreatrecession.info\/blog\/untying-the-gordian-knot\/hommage_to_the_gordian_knot\/\" rel=\"attachment wp-att-75842\"><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-75842\" src=\"http:\/\/thegreatrecession.info\/blog\/wp-content\/uploads\/Hommage_to_the_Gordian_knot-300x225.jpg\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" srcset=\"http:\/\/thegreatrecession.info\/blog\/wp-content\/uploads\/Hommage_to_the_Gordian_knot-300x225.jpg 300w, http:\/\/thegreatrecession.info\/blog\/wp-content\/uploads\/Hommage_to_the_Gordian_knot-150x113.jpg 150w, http:\/\/thegreatrecession.info\/blog\/wp-content\/uploads\/Hommage_to_the_Gordian_knot-768x576.jpg 768w, http:\/\/thegreatrecession.info\/blog\/wp-content\/uploads\/Hommage_to_the_Gordian_knot-500x375.jpg 500w, http:\/\/thegreatrecession.info\/blog\/wp-content\/uploads\/Hommage_to_the_Gordian_knot.jpg 800w\" alt=\"By Kikuyu3 (Own work) [CC BY-SA 4.0 (http:\/\/creativecommons.org\/licenses\/by-sa\/4.0)], via Wikimedia Commons\" width=\"300\" height=\"225\" \/><\/a><\/p>\n<p class=\"wp-caption-text\">Is balance sheet reduction the Fed\u2019s Gordian knot?<\/p>\n<\/div>\n<p>After all,\u00a0the <a href=\"http:\/\/thegreatrecession.info\/blog\/no-end-of-quantitative-easing\/\">Federal Reserve\u2019s End of Quantitative Easing Didn\u2019t Happen<\/a> last time they said it would.\u00a0It turned out the Fed actually planned to continue QE at a gradual level by reinvesting matured assets. Nevertheless, the mere announcement in 2013 that it would terminate QE in 2014 created the infamous \u201cTaper Tantrum.\u201d The Fed hadn\u2019t said anything back then that I was able to find about reinvesting the funds in its balance sheet until after they supposedly stopped QE in the fall of 2014. It turned out the stop was not a quite a full stop.Unwinding its balance sheet is likely to prove to be the Fed\u2019s Gordian knot.<\/p>\n<p><strong>Federal Reserve balance sheet reduction that didn\u2019t happen \u2026 again \u2026 so far<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p>So, here we are, and so far there is no reduction. It is now three years since the Fed \u201cended quantitative easing,\u201d and its balance sheet is still holding around the $4.5 trillion mark where QE was supposed to end. Now <em>that\u2019s<\/em> gradual! It\u2019s taken three years just for the Fed to <em>say<\/em> it is going to start reducing the balance; so, let\u2019s see how that balance sheet reduction is going for them now that it has supposedly started:<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<p>&nbsp;<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Federal Reserve Hesitates on QE Unwind \/ Balance Sheet Reduction Is the Federal Reserve\u2019s Great Unwind already coming unwound? I thought it would be good to check up on Federal Reserve balance sheet reduction since the Fed is supposed to be up and running on the move out of quantitative easing this month. It should [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[49,11574,303,16757,11687,661,662,8625,3650],"class_list":["post-27396","post","type-post","status-publish","format-standard","hentry","category-economics","tag-balance-sheet","tag-david-haggith","tag-fed","tag-gordian-knot","tag-great-recession-blog","tag-qe","tag-quantitative-easing","tag-quantitative-tightening","tag-us-federal-reserve"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/27396","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=27396"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/27396\/revisions"}],"predecessor-version":[{"id":27397,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/27396\/revisions\/27397"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=27396"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=27396"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=27396"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}