The planned balance-sheet rundown | 07 Abril 2022

07 Abril 2022, GBP/USD

The planned balance-sheet rundown

GBPUSD trading plan:

Federal Reserve officials in March "generally agreed" to cut up to $95 billion a month from the central bank's asset holdings as another tool in the fight against surging inflation. Minutes of the Fed's March 15-16 meeting showed deepening concern among policymakers that inflation had broadened through the economy, which convinced them to not only raise the target policy rate by a quarter of a percentage point from its near-zero level but also to "expeditiously" push it to a "neutral posture," estimated to be around 2.4%.The pace of the planned balance-sheet rundown, which should have the effect of increasing long-term interest rates, is nearly double that of the Fed's "quantitative tightening" from 2017 to 2019, and could also include outright sales of MBS down the road, said the minutes.

Investment idea: sell 1.3110 and take profit 1.3033.

David Johnson
Analyst of «FreshForex» company
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