Economists See Only Slight Impact from Fed Bond Trimming
According to a USA Today article, a recent survey of the National Association of Business Economics found that the majority of the economists surveyed believed that the Federal Reserve's long-awaited move to start reducing its bond holdings will push long-term bond rates higher but only modestly.

The survey, which was released Monday, August 21st, found that 41 percent of economists surveyed expected rates on the 10-year Treasury note to rise by at most one-half percentage point. About one-fourth saw an increase of three-fourths of a percentage point, while 11 percent saw rates increasing by more than 1 percentage point over the extended period that the Federal Reserve will be reducing its holdings.

There is widespread anticipation that the Federal Reserve will announce at its September meeting a starting date for the reduction in its $4.5 trillion balance sheet. However, the market impact is less clear, according to Stuart Mackintosh, President of the National Association for Business Economics, who stated, "The overall view of the panel is that the likely interest-rate impact of the Federal Reserve's balance sheet normalization is fairly benign."
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