The Fed’s move to begin purchasing $60bn of Treasury bills per month will eventually push the size of its balance sheet back up to $4trn over the coming year, not far below its $4.2trn peak. However it would be wrong to view this as a complete capitulation by the Fed or a resumption of QE. In terms of the mix of assets it holds as well as their duration, the Fed is still normalising its balance sheet.
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