The Federal Reserve is sketching out plans to prevent an abrupt contraction in its massive balance sheet next year, when some $500 billion in bonds expire and risk disrupting markets and the U.S. economic recovery.
There were three dissents among the voters in this FOMC meeting which in itself is a bit unusual but the fact that two came from the “Hawkish” side and one from the “Dovish” side shows the wide range of opinions on the economy.
Provided the economy performs as well as Federal Reserve policymakers expect, the Fed will phase out large-scale asset purchases within the next 10 months. That’s a big “if” of course. The Fed has been projecting a stronger recovery each of the last four years, only to see growth average around a tepid 2%.