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Abstract:I wouldn't necessarily start with selling assets,” Mester told reporters, adding the Fed would like to primarily reduce the portfolio by letting securities run off the balance sheet.
Bond sales are not likely to be a first step for the Federal Reserve as it shrinks the balance sheet, but officials may want to consider selling mortgage-backed securities later on to meet their goal of holding mostly Treasury securities, Cleveland Federal Reserve President Loretta Mester said on Wednesday.
“I wouldn't necessarily start with selling assets,” Mester told reporters, adding the Fed would like to primarily reduce the portfolio by letting securities run off the balance sheet.
“I'd be comfortable selling some of the MBS because if you look at the Treasury portion of our portfolio, it's shorter duration than it was last time, so they're going to run off faster.”
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The U.S. Bureau of Labor Statistics revised down the employment growth in the year ending in March by 818,000, an average monthly decrease of about 68,000, the largest downward revision since 2009. The substantial downward revision of employment data re-emphasized the severity and necessity of the U.S. employment problem, paving the way for a rate hike in September. Bearish for the U.S. dollar.
Fed Governor Bowman: There are upside risks to inflation, the labor market continues to strengthen, and a cautious attitude will be maintained at the September meeting. Boston Fed President Collins: If the data is as expected, it would be appropriate to start easing policy "soon". Inflationary pressure will slow down the pace of U.S. interest rate cuts, which will be bullish for the dollar.
The week ahead: Traders on the backfoot ahead of a quiet week
This week, the Italy financial regulator CONSOB issued a warning against an unlicensed broker named Broker Capitals. When we clicked on Broker Capitals' website, its logo, trade name, and design seemed familiar to us.