Wrightson: Fed May End Balance Sheet Runoff This Week

BlockBeats News, October 27th, Analysts from research firm Wrightson predicted that the Federal Reserve may be ready to announce the end of balance sheet reduction this week. Recent overnight repo market trends have shown that financing conditions have tightened, and bank reserves have dropped to levels close to what is considered equilibrium.

The Wrightson team stated that any action taken by the Federal Reserve this week would be a cautious move to avoid putting excessive pressure on the money markets. They noted, "Even if the Fed believes that reserve supply remains quite adequate, we doubt whether the FOMC will ignore the repeated warning signals in recent weeks in the federal funds rate." (FX Street)