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Comment: Fed balance sheet wind down proceeding, New York Fed provides a little more planning information

As of the end of May, the Fed’s holdings of Treasurys, Agency MBS, and Agencys totaled around $3.679 trillion, down $44.1 billion fro a month earlier. The slowdown in reinvestments continues as planned. The Fed is on pace to bring the size of the balance sheet down to around $3.5 trillion consistent with the “abundant reserves” framework monetary policy that was determined earlier in 2019.

On May 30, the New York Federal Reserve issued a “Statement Regarding Plans to Reinvest Principal Payments from Agency Debt and Agency Mortgage-Backed Securities into Treasury Securities.” It provided a few more details as to what will happen with reinvestments of  Agency MBS over the $20 billion cap starting in October 2019.

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