The Fed is entering uncharted territory

[Free Vulcan]

Wednesday, the Federal Reserve proclaimed that the balance sheet reduction plan, which was outlined in a June announcement, will begin next month.

While this is welcome added clarity on the Fed’s intentions, they have once again missed an opportunity to offer a comprehensive strategy for conducting monetary policy. There are still too many potential risks in the Fed’s plan.

Chair Janet Yellen, in her prepared remarks, said that the Fed does “…not plan on making adjustments to the balance sheet normalization program.” But as they venture into uncharted territory, conducting a monetary operation that they have no experience with, a measure of caution — rather than certainty — should be coming out of the central bank.

Read more at: http://thehill.com/opinion/finance/351741-the-fed-enters-uncharted-territory-with-the-economy-at-stake

[InHeavenThereIsNoBeer]

Either the Fed has had a $4.5T balance sheet before and therefore has drawn it down before, in which case this is not uncharted territory, or we're already in uncharted territory.

[roamer_1]

Either the Fed has had a $4.5T balance sheet before and therefore has drawn it down before, in which case this is not uncharted territory, or we're already in uncharted territory.

Not exactly... Look to the good ship Venezuela for navigational skilz. /s