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By Christopher ELLINGER, Assistant Portfolio Manager, Money Markets, Fidelity International
A few unusual paragraphs in the minutes from the May FOMC meeting have caught the attention of market participants. It has raised some bigger questions about the length of time over which the Fed will be shrinking their balance sheet and their plans for the future operation of US monetary policy.
GRAPHIQUE VOIR VERSION PDF
The FOMC currently sets a target band for the overnight rate for uncollateralized lending between banks, the fed funds rate, and also sets the interest rate that they pay on excess reserves, the IOER. The IOER is currently set to be equal to the upper end of the target band.
Since the beginning of...
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