The Federal Reserve is expected to approve plans next week to reduce a nearly $9 trillion balance sheet that ballooned as part of its efforts to fight the pandemic recession, in a process U.S. central bank officials expect to run without a hitch. The past week may point to a bumpier ride ahead, with analysts noting an unexpected, nearly $500 billion shift in the Fed’s balance sheet driven by factors beyond its control and volatility in stock and bond markets as signs the central bank’s pivot to tighter monetary policy may not run so smoothly. Yields on the government bonds most sensitive to expectations for how the Fed may cull its balance sheet have swung wildly in the past week, and measures of fixed-income market volatility are near their highest since the onset two years ago of the coronavirus pandemic, which set the central bank on its bond-buying spree in the first place.
— Read on ca.finance.yahoo.com/news/market-volatility-balance-sheet-surprises-102148563.html
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