NEW YORK, March 30 A JPMorgan economist said on
Thursday he expected the U.S. Federal Reserve to start paring
the size of its $4.5 trillion balance sheet in early 2018 with a
focus on ending its reinvestment in mortgage-backed securities.
"In our baseline projection, the Fed slowly phases out MBS
reinvestments beginning in the spring of next year, never halts
reinvestments of Treasuries, never sells MBS, and reaches its
new optimal size of the balance sheet in early 2024, with excess
reserves in the banking system of $500 billion," JPMorgan
economist Michael Feroli wrote in a research note.
(Reporting by Richard Leong; Editing by Chizu Nomiyama)