Fed Signals Quantitative Tightening of 116 Trillion Won per Month... Big Step Also Foreseen

[Asia Economy New York=Special Correspondent Joselgina] The U.S. central bank, the Federal Reserve (Fed), has indicated the possibility of initiating quantitative tightening (balance sheet reduction) within a limit of $95 billion per month (approximately 115.7 trillion KRW).

According to the minutes of the March Federal Open Market Committee (FOMC) regular meeting released by the Fed on the 6th (local time), the participants generally agreed to reduce the Fed's holdings by $60 billion in Treasury securities and $35 billion in mortgage-backed securities (MBS) each month.

Many FOMC participants mentioned that "especially if inflationary pressures rise or strengthen, it may be appropriate to raise the benchmark interest rate by 0.5 percentage points or more at one or more future meetings," signaling a 'big step' increase.

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