Derby’s Take: Powell Says Fed Will Resolve Balance Sheet Size Later

As the Federal Reserve embarks on slowing the pace of its asset buying, it has yet to address what will happen with its massive holdings of bonds and cash once that process is complete.

On Wednesday, the U.S. central bank announced an imminent slowing of its $80 billion a month in Treasurys bond purchases and $40 billion a month in mortgage bond buys, with an eye toward ending those transactions completely by the middle of next year.