Fed favors reducing monthly runoff pace by half, minutes show

Minutes from the last Federal Reserve meeting read, “In their discussions regarding how to adjust the pace of runoff, participants generally favored reducing the monthly pace of runoff by roughly half from the recent overall pace. With redemptions of agency debt and agency mortgage-backed securities expected to continue to run well below the current monthly cap, participants saw little need to adjust this cap, which also would be consistent with the Committee’s intention to hold primarily Treasury securities in the longer run. Accordingly, participants generally preferred to maintain the existing cap on agency MBS and adjust the redemption cap on U.S. Treasury securities to slow the pace of balance sheet runoff. “