Spotlight Growth
No Result
View All Result
Wednesday, February 1, 2023
  • Home
  • News
    • Bio/Med/Pharma
    • Cannabis
    • Commodities
    • Consumer Goods
    • Crowdfunding
    • Cryptocurrency
    • Crypto Cheat Sheets
    • Earnings
    • Entertainment
    • Financials
    • Market News
    • Opinion
    • Politics
    • Technology
    • Venture Capital/Private Equity (VC/PE)
  • Video
  • Stock and Crypto Screener
  • Home
  • News
    • Bio/Med/Pharma
    • Cannabis
    • Commodities
    • Consumer Goods
    • Crowdfunding
    • Cryptocurrency
    • Crypto Cheat Sheets
    • Earnings
    • Entertainment
    • Financials
    • Market News
    • Opinion
    • Politics
    • Technology
    • Venture Capital/Private Equity (VC/PE)
  • Video
  • Stock and Crypto Screener
No Result
View All Result
No Result
View All Result
Home Market News

Fed Continues to Trim Its Bloated Balance Sheet, Plans to Ramp Up Selling in 2019

by admin
October 28, 2018
in Market News
0
Fed Continues to Trim Its Bloated Balance Sheet, Plans to Ramp Up Selling in 2019

Federal Reserve Balance Sheet Trimming, Selling Outlook Ticks Up in 2019 News

After the financial crisis of 2008, the Federal Reserve found itself in a very difficult position in terms of its ability to protect the U.S. economy.  Many of the traditional rules has to be rewritten, and the central bank embarked on a long-term program of quantitative easing (QE) in order to rectify matters.  As the economy continues to strengthen, many of these measures are no longer needed and the Federal Reserve is set to reduce its balance sheet into 2019.  But key questions remain, and many investors are wondering if these actions to be taken by the Fed will ultimately weigh on stock markets.

Source: Bloomberg
Source: Bloomberg

In this chart, we can see that quantitative easing began in 2008 and rose steadily in all of the world’s major economic regions.  The Federal Reserve was actually somewhat conservative in this respect (relative to the actions taken by the European Central Bank and the Bank of Japan), but this would not be readily apparent if we only read the financial news headlines in the United States.

At the same time, the Fed is expected to be the most aggressive central bank in terms of its tightening programs going forward.  Fed Chair Jerome Powell has made it clear that accommodative monetary policy is no longer needed, and that it is time to shrink the balance sheet to levels that are more normalized on an historical basis.  The Fed’s tightening program is expected to move swiftly into the final parts of 2018, pause a bit, and then begin again with aggressive tightening into the middle of 2019.

Source: Bloomberg
Source: Bloomberg

The biggest impact will be seen in the number of Treasury securities which are held by the Federal Reserve.  Mortgage-backed securities will also be reduced by a substantial amount (but not to the same degree). Under its current schedule, the Fed acted to reduce its balance sheet by $20 billion per month during the first quarter of 2018.  This figure increased to $30 per month during the second quarter of 2018 and the trend continued during the third quarter (at $40 billion per month).  During the fourth quarter, the Federal Reserve is expected to reduce its balance sheet at a pace of $50 billion.

Overall, the Fed’s quantitative easing programs are clearly being phased-out, and this will continue at an increasingly aggressive pace over the next few years.  Of course, there are risks to these projections, and we could see deviations if the growth outlook for GDP is materially weakened in the quarters ahead.  Rising debt levels suggest that this remains a possibility, so it is important for investors and consumers to remember that these projections may still change if economic surprises occur in the future.  

Source: Bank of the West
Source: Bank of the West

These trends are important to watch, as they can have a significant impact on interest rates and stock market valuations – and these are all factors which have a strong effect on the real consumer economy.  The Federal Reserve holds a strong position in this regard. But it is up to consumers to monitor their finances (and their investments) in protective ways as these broader market trends continue to unfold.

Article By: Ric Cox

Tags: Bloombergbondscentral bankscommon stockdebtDJIADow Jonesemerging growthFedFed actionFed balance sheetFed chairman powellFed sellingFederal ReserveFederal Reserve newsFOMCgrowthinterest ratesinvestinginvestmentJerome Powellmarket newsMBSNASDAQnewsNYSEpublic companyQEQE programQE taperrecessionrising ratesSpotlight GrowthSpotlight Growth StocksSPXSPYstock marketstock market crashstockstradingTreasuries
  • Trending
  • Comments
  • Latest
Asure Software NASDAQ ASUR Human Capital Management HCM Industry Spotlight Growth

Asure Software (NASDAQ: ASUR) is Expanding to Meet the Rising Demand for Human Capital Management Software

September 27, 2022
OLB Group NASDAQ OLB Cuentas NASDAQ CUEN Partnership Fintech Spotlight Growth

OLB Group (NASDAQ: OLB) and Cuentas (NASDAQ: CUEN) Team Up to Bring Fintech Solutions to Over 32,000 Bodegas Across the United States

October 6, 2022
Siyata Mobile NASDAQ SYTA SYTAW SD7 VK7 Purchase Orders Spotlight Growth

New Purchase Orders for SD7 Rugged Device, VK7, and Other Accessories Boost Siyata Mobile’s Outlook (NASDAQ: SYTA)

December 14, 2021
Telcoin TEL Crypto Spotlight Growth

Telcoin (TEL) Quietly Leads a Crypto Remittance Revolution

June 15, 2021
Cybersecurity Stocks Coming Into Focus Amid High-Profile Attacks

Cybersecurity Stocks Coming Into Focus Amid High-Profile Attacks

0
Safe-T SFET NASDAQ UN Presentation

Safe-T (NASDAQ: SFET) Has Been Selected to Present at the United Nations’ Office of Information and Communications Technology Event

0
Safe-T Group SFET Q4 FY 2020 Financial Results

Safe-T Group (NASDAQ: SFET) Reports Fourth Quarter and Full Year 2020 Financial Results

0
Safe-T Group NASDAQ SFET FY 2020 Prelim

Safe-T Group Ltd. (NASDAQ: SFET) Estimates Record-High Annual Revenues of Approximately $4.9 Million Representing ~50% Growth YoY 2020

0
Versus Systems NASDAQ VS Resolve Debt Partner AI Gamification Consumer Debt Spotlight Growth

Versus Systems (NASDAQ: VS) and Resolve Debt Partner to Integrated Generative AI and Gamification to Customer Payments and Credit Markets

February 1, 2023
Finding the Most Accurate Technical Analysis Indicator Spotlight Growth

Finding the Most Accurate Technical Analysis Indicator

January 31, 2023
Introduction to Stock Options Trading Educational Spotlight Growth

Introduction to Stock Options

January 31, 2023
Oxbridge Re NASDAQ OXBR SurancePlus Tokenized Reinsurance Contracts Spotlight Growth

Oxbridge Re (NASDAQ: OXBR) Announces Its New Subsidiary SurancePlus: To Issue Tokenized Reinsurance Securities

February 1, 2023
ADVERTISEMENT

Recent News

Versus Systems NASDAQ VS Resolve Debt Partner AI Gamification Consumer Debt Spotlight Growth

Versus Systems (NASDAQ: VS) and Resolve Debt Partner to Integrated Generative AI and Gamification to Customer Payments and Credit Markets

February 1, 2023
Finding the Most Accurate Technical Analysis Indicator Spotlight Growth

Finding the Most Accurate Technical Analysis Indicator

January 31, 2023

Categories

  • Bio/Med/Pharma
  • Cannabis
  • Commodities
  • Consumer Goods
  • Crowdfunding
  • Crypto Cheat Sheets
  • Cryptocurrency
  • Earnings
  • Education
  • Entertainment
  • Financials
  • Market News
  • Opinion
  • Politics
  • Real Estate
  • Split Watch
  • Sponsored
  • Store
  • Technology
  • Uncategorized
  • Venture Capital/Private Equity (VC/PE)

Site Navigation

  • Disclosures
  • Terms Of Service
  • Privacy Policy
  • Contact Us

Copyright © 2017-2022 Spotlight Growth. All Right Reserved. Designed by Cool Cat Interactive.

No Result
View All Result
  • Home
  • News
    • Bio/Med/Pharma
    • Cannabis
    • Commodities
    • Consumer Goods
    • Crowdfunding
    • Cryptocurrency
    • Crypto Cheat Sheets
    • Earnings
    • Entertainment
    • Financials
    • Market News
    • Opinion
    • Politics
    • Technology
    • Venture Capital/Private Equity (VC/PE)
  • Video
  • Stock and Crypto Screener

Copyright © 2017-2022 Spotlight Growth. All Right Reserved. Designed by Cool Cat Interactive.

Newsletter Signup

Subscribe to our weekly newsletter below and never miss the latest small/micro-cap analysis and investment news from Spotlight Growth.

Enter your email address

Thanks, I’m not interested