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Is This What Monetary Tightening Looks Like?

Is This What Monetary Tightening Looks Like?

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In light of the December FOMC meeting minutes, we should expect modest increases in the federal funds target soon, with a reduction of the balance sheet following the increase in rates. The exact timing of balance sheet reduction is yet to be determined. The shift in tone reflects the responsibility of the committee to maintain the Federal Reserve’s dual mandate of promoting price stability and maximum employment.

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