In honor of the next Fed asset build-up, I offer this musical tribute. Those timeframes are highly unlikely in actual practice because they presume the Fed won’t halt or reverse balance sheet reductions when the next recession starts.įrom a practical standpoint, somewhere between 30 years and never is about right. Trim off any paper that hangs off the sides. Glue the goggle strap to the middle of the minion’s head. Use a brown marker to color in the iris and a black marker to outline the eye. Begin by gluing the eyes to the middle of the goggle (s). Those are the absolute minimum and maximums assuming the Fed starts reduction and does not stop until it’s done. Download the minion template, print, and cut out the pieces you need. The maximum reduction rises to $50 billion a month, $30 billion a month for Treasurys and $20 billion a month for mortgage securities.Īt $10 billion a month, $120 billion a year, it would take the Fed 29 years to reduce its balance sheet to $1.0 trillion from $4.5 trillion.Īt $50 billion a month, $600 billion a year, it would take 5.8 years. If the Fed slowly ratchets up its cap, we are talking about a 10-year time frame. The initial $10 billion cap on reductions is $6 billion in Treasury securities and $4 billion in mortgage bonds.
