Shrinking the balance sheet refers to measures taken by the Fed to reduce its assets and liabilities.
The Fed’s balance sheet reduction will simultaneously sell assets, take money back and reduce assets and liabilities in order to regulate.
The Fed’s balance sheet reduction is a tightening policy that will reduce the amount of money in circulation.
When the Fed shrinks its balance sheet, it takes money out of the economy, and as the money goes down, the value of that money starts to go up.
The Fed’s tapering schedule thus amounts to a disguised appreciation of the dollar.
The Fed’s balance sheet reduction will help rebuild the credibility of the dollar, reduce negative externals, and provide the world with high quality, which will help alleviate the lack of risk averse assets such as Europe and Japan, and reduce the impact of Fed rate hikes on countries with easy money.
The Fed’s shrinking of its balance sheet amounts to a tighter monetary policy of raising interest rates.
Everyone should know that as a hedge, whenever the dollar rises, dollar-denominated gold will fall accordingly.
The scale reduction of the Federal Reserve is the performance of the Federal Reserve’s disguised interest rate increase.
