2018-07-27

Fed Reduced Balance Sheet $13.9 B Last Week

The Fed's balance sheet contracted $13.9 billion. None of it was treasuries. The Fed now has $24 billion left to reduce in July with only the final week remaining. All of the reduction should be U.S. treasuries next week assuming the Fed doesn't get a jump on August's $40 billion. On July 31, $28.5 billion in treasuries matures. Assuming the Fed stays on schedule, next week should be the largest single week of balance sheet reduction since the policy started in October. The largest reduction to date was $23.2 billion rolled off in the week ended February 21.

The S&P 500 Index gained 1.1 percent over the past week.

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