Close Close
Sign In
Newsletters
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards
Podcast Center Video Center Webcasts Resource Center Events
About ThinkAdvisor Contact Us Advertise With Us Asset & Logo Licensing Sitemap Terms of Service Privacy Policy Copyright © 2024 ALM Global, LLC. All Rights Reserved.
ThinkAdvisor

Portfolio > Economy & Markets

Fed Balance Sheet to Reach $4 Trillion With Next Announcement

By John Sullivan

X
Your article was successfully shared with the contacts you provided.

Call it QE Whatever.

The Federal Reserve will “amplify record accommodation” by announcing $45 billion in monthly Treasury buying that will push its balance sheet to almost $4 trillion, according to a Bloomberg survey of economists.

The news service reports that 48 of 49 economists predict that the Federal Open Market Committee on Wednesday will purchase Treasuries to bolster an existing program to buy $40 billion in mortgage bonds each month. The panel pledged in October to continue that plan until the labor market improves “substantially.”

“It’s going to be massive and open-ended in size,” Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York and a former New York Fed economist, told Bloomberg.

Ben Bernanke and his FOMC colleagues will press on with purchases at least through the first quarter of 2014, according to the median estimate in the Dec. 7-10 survey. They are expanding the balance sheet beyond $2.86 trillion in a bid to spur growth and lower an unemployment rate of 7.7%.

“They view this stimulus as what’s needed to sustain the economy” and reinforce improvements in industries such as autos and housing, added John Silvia, chief economist at Wells Fargo & Co.

Bloomberg notes that the FOMC gathers Tuesday for a two-day meeting in Washington and plans to release a statement on policy at around 12:30 p.m on Wednesday. That will be followed by forecasts for growth, unemployment and inflation. Bernanke is scheduled to hold a press conference at 2:15 p.m., after release of the forecasts.

The Fed’s latest round of quantitative easing will total $1.1 trillion, with about $620 billion in mortgage-backed securities and $500 billion in Treasuries, according to the median estimate in the survey, according to Bloomberg.

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.