April 7 (Reuters) – The Federal Reserve on Wednesday signaled it will likely start culling assets from its $9 trillion balance sheet at its meeting in early May and will do so at nearly twice the pace it did in its previous “quantitative tightening” exercise as it confronts inflation running at a four-decade high.
Minutes from the central bank’s meeting last month, released Wednesday, showed policymakers were presented a range of options for reducing the size of its balance sheet. That stash of assets has roughly doubled in size during the coronavirus pandemic as the Fed used purchases of Treasury securities and mortgage-backed securities to smooth market functioning and augment the effects of its interest rates cuts.
