With markets normalising and growth returning, the bank confirmed its intention to shut down emergency liquidity schemes in early 2010 and taper off asset purchases by March 31 as part of a long rolling exit from unconventional policy.
Consistent with this, the Fed also dropped another line from prior statements that said it was "monitoring the size and composition of its balance sheet and will make adjustments to its credit and liquidity programmes as warranted".
This appeared to signal that the Fed is reluctant to introduce any new unorthodox schemes and wants to de-emphasise the quantitative easing ("size") and credit easing ("composition") aspects of the balance sheet expansion used to fight the crisis...
Wednesday, December 30, 2009
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