FRB asset size expected to grow to 4.7 trillion dollars, NY Fed trader survey

[New York 3rd Reuters]-The Fed's Fed's Fed balance sheet scale will reach $ 3.8 trillion-$ 4.7 trillion by 2025 It was clarified that the expectation of was shown.

According to the survey, the FRB has the potential to resume buying US Treasuries at the earliest, within 2025 at the latest. However, the decision to purchase JGBs is thought to depend on whether the size of the debt side, including reserve deposits and currency deposits with commercial banks, will increase.

The current asset size of FRB is about $ 3.8 trillion. This includes US Treasury bonds purchased through quantitative easing after the 2008 financial crisis.

When the FRB decided to cut rates for the first time since 2008 at the Federal Open Market Committee (FOMC) on July 30-31, it decided to end balance sheet reduction on August 1 and plan Two months ahead. [nL4N24W51E]

In order to control interest rates, the FRB will eventually need to reinvest asset purchases and at the same time build up reserve deposits at commercial banks.

Reserve deposits currently amount to about $ 1.5 trillion. The study showed that this would decrease from $ 1.1 trillion to $ 1,250 billion and then increase to $ 1.2 trillion-$ 1.5 trillion in 25 years.