Federal Reserve Continues Predictable Reduction Of Securities Holdings

According to Odaily, the Federal Reserve has released its semi-annual monetary policy report, highlighting its ongoing strategy to significantly reduce holdings of U.S. Treasury and agency securities in a predictable manner. Since June 2024, the Federal Reserve has decreased its securities holdings by $297 billion, with a total reduction of approximately $2 trillion since the balance sheet reduction began. The Federal Open Market Committee (FOMC) intends to maintain securities holdings at levels consistent with the efficient implementation of monetary policy under an ample reserves regime. To ensure a smooth transition, the FOMC slowed the pace of securities reduction in June 2024 and plans to halt the reduction when reserve balances are slightly above the level deemed consistent with ample reserves.