US Fed may not sell bonds they buy through money printing till year 2020
[NEW YORK] The US Federal Reserve is considering jettisoning a plan to eventually sell off the massive haul of bonds it is now buying, a politically defensive strategy that would have the added benefit of supporting the economy for years to come.
In what would be a revision of their blueprint for the eventual tightening of monetary policy, Fed officials have said they could simply allow the trillions of dollars in securities they have bought through three rounds of quantitative easing (QE) to mature.
Fed chairman Ben Bernanke and other officials have said a decision not to sell the mortgage and Treasury bonds would only add about a year to the process of returning the central bank's balance sheet to a more normal size of around US$1 trillion, probably around 2020. It is worth some US$3 trillion now, and could swell to near US$4 trillion by year-end.
While a new "exit strategy" is not likely to emerge from the Fed's next meeting on March 19-20, officials plan to review the blueprint soon because it has not been updated since mid-2011.
=> ok, can is further kicked till 2020
Ride at your own risk !!!
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