Almost 4 years after the U.S. Federal Reserve first announced plans to taper its bond purchase programs, it is now planning to move a further step with the paring of of some of its US$4.5 trillion in bond holdings.  Boston Fed President Eric Rosengren expects this move – opposite to the policies of Quantitative Easing put on by the Fed post the sub-prime crisis – to start with retiring some maturing bonds, then gradually going on to reducing the securities that are being reinvested.  These gradual moves are unlikely to affect planned rate hikes and if executed properly, will not have an impact on the financial markets.

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