Global Macro Service > Research Briefings > United States

Fed to expand the balance sheet via bill purchases

As signaled by Fed Chair Powell’s “pre-announcement” earlier this week, the Fed has formally announced that it will start to expand the size of its balance sheet in order to restore the level of bank reserves to meet demand. These purchases are technical in nature and will not represent quantitative easing (QE). Announcing the reserve/balance sheet operations ahead of the policy meeting at the end of the month likely in part reflects a deliberate strategy to separate these technical operations from the fundamental interest rate policy.

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