Aggressive Fed tightening could throw a spanner in D-Street party

Minutes of meeting showed Fed plans to shrink its $9-trn balance sheet by over $1 trn a year, pare bond holdings by $95 bn a month to cool off inflation which has hit four-decade high

The Federal Open Market Committee (FOMC) minutes released Wednesday night indicate a more aggressive monetary tightening by the US central bank. The minutes of the meeting showed that the Fed plans to shrink its $9-trillion balance sheet by more than $1 trillion a year. It plans to reduce its massive bond holdings by as much as $95 billion a month to cool off inflation which has reached its highest level in four decades. The 10-year US Treasury yields have already hardened in the past one month from 1.77 per cent on March 7 to 2.6 per cent. In the past