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FEDERAL RESERVE <br />10,000,000 <br />9,000,000 <br />8,000,000 <br />7,000,000 <br />0 6,000,000 <br />E 5,000,000 <br />= 4,000,000 <br />3,000,000 <br />2,000,000 <br />1,000,000 <br />0 <br />Federal Reserve Balance Sheet Assets <br />S' S' SP i' SP S' SP SP S0S0So <br />b0b9p0pVp� bVb?b1b� 4, b� <br />T 6 6) O Q 6 S O A <br />Source: Federal Reserve <br />6.00% <br />5.00% <br />4.00% <br />a <br />-2 3.00% <br />v <br />2.00% <br />1.00% <br />0.00% <br />Source: Bloomberg <br />CM <br />CHANDLER <br />ASSET MANAGEMENT <br />Effective Federal Funds Rate <br />The Federal Open Market Committee (FOMC) delivered the first rate cut of the easing cycle at the September meeting. Although a <br />reduction in the Fed Funds Rate was widely anticipated, the magnitude was somewhat of a surprise, as market participants were split <br />between whether the FOMC would cut by 25 basis points or 50 basis points. Chair Jerome Powell reiterated previous statements <br />acknowledging that monetary policy has shifted into a more balanced approach addressing price stability and full employment in tandem. <br />The Fed released the quarterly Summary of Economic Projections (SEP) which now forecasts a substantially lower median Fed Funds Rate <br />expectation among Fed Governors in 2025 to 3.1 — 3.6%. The Fed continues to reduce its holdings of U.S. Treasury securities and agency <br />mortgage -backed securities as per its predefined schedule of $25 billion and $35 billion per month. Since the Fed began its Quantitative <br />Tightening campaign in June 2022, securities holdings have declined by approximately $1.8T to approximately $7.1T. <br />12 <br />31/87 <br />