Quietly tucked into the Federal Open Market Committee meeting minutes, the Federal Reserve revealed its plan to start to unwind the $4.5 trillion portfolio of bonds.
The meeting minutes, released earlier this week, gave added insight to what the Fed discussed in its May meeting, where it chose to hold off on raising interest rates.
And according to an article in CNBC by Jeff Cox, the move to place the news at the very end was probably very intentional.
From the article:
The plan, awaited by financial markets for months or even years, was tucked into the minutes almost as an afterthought — nothing to see here, we'll just unwind the most ambitious stimulus effort in central banking history over here in the corner while the financial markets go on their happy way.
The process will seek to slowly and predictably undo years of quantitative easing, where the Fed engaged in three rounds of monthly bond buying that ended in 2014. The program generated important results, keeping interest rates low in the post-crisis environment and coinciding with the second-best bull run in stock market history — even if the results for the broader economy were considerably less robust.
The article added that the minutes showed most all of the FOMC members approved of the process, and the subtle announcement should hopefully send a signal to markets to not make too big a deal of it either.
The FOMC hinted that would start the process of shrinking the balance sheet in its March meeting earlier this year. Members brought up the balance sheet in the meeting, saying they may begin to shrink it. During March’s meeting, the FOMC raised rates for the second time in three months and the first time in 2017.