United Kingdom

Fed’s Debt Runoff Is ‘Painless’ at $1 Trillion Mark, With Bigger Test Ahead

(Bloomberg) — The Federal Reserve has now offloaded about $1 trillion of its bond holdings since it began working down its bloated balance sheet last year, with no sign of the kinds of strains in financial markets that spooked policymakers the last time they oversaw such a program.

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The System Open Market Account — the name for the central bank’s portfolio of assets — amounts to about $7.4 trillion now, down from the record $8.4 trillion reached in April last year, data from the New York Fed show. As part of its steepest monetary-tightening campaign in decades, the Fed is letting up to $60 billion of Treasuries and $35 billion of mortgage-backed debt mature each month without replacement.