Fed's Waller Says Approximate Endpoint For Reserves Is Likely Around 10%-11% Of GDP; "No Reason" For On RRP To Have Anything In It; Expect Will Think About Slowing The Pace Of Tapering Balance Sheet Sometime This Year
Portfolio Pulse from Benzinga Newsdesk
Fed's Waller suggests the endpoint for reserves to be around 10%-11% of GDP, indicating a potential slowdown in the pace of tapering the balance sheet later this year. He also sees no reason for the Overnight Reverse Repurchase Agreement (RRP) facility to hold funds.
January 16, 2024 | 4:29 pm
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Fed's Waller's comments on slowing balance sheet tapering could lead to a short-term positive sentiment for SPY as it may imply a less aggressive monetary tightening.
Waller's comments suggest a less hawkish stance on monetary policy, which is typically positive for the stock market as it may lead to lower interest rates and support for asset prices. As SPY is a broad market ETF, it is likely to be positively impacted by such sentiments in the short term.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 70