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FED Stocks Rise Sharply As Plans To Rate Hike On March For Reducing Balance Sheet

WASHINGTON:The Federal Reserve expects it will soon be appropriate to raise the target range for the federal funds rate as inflation is well above 2 % and the labor market is strong.

Policymakers also decided on January 26th to continue to reduce the monthly pace of its net asset purchases, bringing them to an end in early March.

Beginning in February, the central bank will increase its holdings of Treasury securities by at least $20 billion per month and of agency mortgage-backed securities by at least $10 billion per month.

Regarding the $8.9 trillion balance sheet, the reduction will start after interest rates increase and the central bank intends to reduce its securities holdings over time by adjusting the amounts reinvested of principal payments received from securities held in the System Open Market Account (SOMA), a separate statement showed