While expectations are universal that the FOMC will remain on hold with interest rates at the April 30-May 1 meeting, there is a good possibility that it will elect to make an announcement about a change in balance sheet policy. At his March 20 press conference, Chair Jerome Powell signaled that the FOMC was prepared to adjust the pace of reductions in balance sheet reinvestment to slow the shrinking of the Fed’s holdings of US treasuries and agency mortgage-backed securities. The intent is first to achieve a smoother transition for markets to avoid liquidity problems for money markets and to bring reserves down from ... (full story)