Fed's Bowman Says 'Critical' To Continue Shrinking Size Of Balance Sheet; Some Ways To Go In Shrinking Size Of Fed Balance Sheet
Portfolio Pulse from Benzinga Newsdesk
Fed's Bowman emphasized the importance of continuing to reduce the size of the Federal Reserve's balance sheet, indicating that there is still significant progress to be made in this area.

April 05, 2024 | 5:32 pm
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The emphasis on shrinking the Federal Reserve's balance sheet could lead to increased market volatility, potentially impacting SPY as it reflects the broader market.
The process of reducing the Federal Reserve's balance sheet often leads to tighter monetary conditions, which can result in higher interest rates. This scenario typically creates uncertainty in the market, leading to increased volatility. As SPY is a broad market ETF, it's likely to be impacted by these macroeconomic changes, potentially leading to a decrease in its value in the short term.
CONFIDENCE 85
IMPORTANCE 75
RELEVANCE 80