Goldman Wonders If Fed Balance Sheet Normalization Is Part of Rate Hike Plan

As the US interest rate panoply appears like it might change – in some cases dramatically so – a larger question is being asked by Goldman Sachs. It is not just that US interest rates are going to be hiked, but also the method by which rates could be adjusted is at issue. Certain methods, such as reducing the historic $1.75 trillion Fed balance sheet, could be accomplished through much less obvious efforts than the public reduction of the US Federal Funds rates.

Fed balance sheet normalization might be part of rate hike methodology

There is a current debate inside the FOMC about Fed balance sheet normalization taking place as Bill Gross...