Fed abruptly ending balance sheet reduction in September is unlikely: Citi
It is unlikely that the Federal Reserve will abruptly announce a balance sheet reduction ending in September or earlier, Citi economists said in a Wednesday note.
However, this narrative could change “if there is a material weakening in the labor market and activity,” Citi economists note. "We do not expect any major liquidity pressures in the coming months with reserves still at abundant levels, reverse repo balances still ~ $290bln and the standing repo facility serving as a backstop."
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