The Federal Reserve will be conducting operations that look and sound a lot like what it did to pull the economy out of the financial crisis. However, the process this time around will be different in the details.
that was reminiscent of those dark days more than a decade ago. Last week, overnight repurchase, or repo, markets froze up and sent short-term yields soaring, a move that included the benchmark funds rate trading out of the range that the Fed's trading desk targets.
"The balance sheet is incredibly important," Rick Rieder, global chief investment officer of fixed income at asset management giant BlackRock, said at last week'spresented by CNBC and Institutional Investor. "The Fed needs to let the balance sheet grow. [Powell] alluded to it and you saw it played out in spades [last] week."
"They need to restore not just confidence," Krosby said. "Empirically, they need to restore the balance sheet to a level that keeps the equilibrium between supply and demand intact."
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