“Some participants judged that a significant amount of balance sheet shrinkage could be appropriate over the normalization process, especially in light of abundant liquidity in money markets and elevated usage of the ON RRP facility.”

Almost all participants agreed that it would likely be appropriate to initiate balance sheet runoff at some point after the first increase in the target range for the federal funds rate.However, participants judged that the appropriate timing of balance sheet runoff would likely be closer to that of policy rate liftoff than previous experience

“Some participants commented that removing policy accommodation by relying more on balance sheet reduction and less on increases in the policy rate could help limit yield curve flattening during policy normalization.”

市場膝反射的反應升息預期提前，但縮表才是之後最大的風險，利率反彈的壓力仍大，長天期債券要小心