The Federal Reserve is making headlines by raising interest rates at the fastest pace in a single year since the 1980s, concerning investors and consumers alike with fears the central bank could go too far, too fast.
But it’s another lesser-known decision — albeit a substantially more complex one — that could have an even greater influence over how expensive it is to borrow money. And it’s all coming to a head this month.
Over a three-month period, the Fed has been letting $47.5 billion worth of assets every 30 days roll off its massive near-$9 trillion bond portfolio, more formally known as the balance sheet. But starting in September, the Fed kicked the process up a notch, doubling how many Treasury and mortgage-backed securities it’s rolling off to $95 billion.
