Wall Street's major banks have delayed the expected completion date for the Federal Reserve's balance sheet reduction.
Minutes from the December Federal Open Market Committee revealed that banks now anticipate the drawdown to finish in June 2025, a shift from previous predictions.
The Fed has been conducting quantitative tightening to reduce its asset holdings, which peaked at $9 trillion during the COVID-19 pandemic.
Despite not announcing new details regarding the balance sheet, the Fed adjusted the reverse repo facility rate to encourage cash movement into private markets.
Challenges, including government financing uncertainties and market volatility, complicate the Fed's approach to adjusting liquidity effectively.
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