Barclays: From the perspective of Risk Management, the Federal Reserve should end the balance sheet reduction ahead of schedule

BlockBeats news, on September 20, Barclays believes that the Fed has indicated that it can reduce its balance sheet while droping interest rates, but for Risk Management considerations, it is recommended to end the balance sheet reduction ahead of schedule. Barclays still expects the Fed to end quantitative tightening in December, and the Federal Open Market Committee (FOMC) will announce it in November. "In 2019, the scarcity of reserves has intensified the already tense situation in the repo market, leading to a significant rise in financing interest rates, causing serious disruption in the US Treasury market," Barclays strategist Joseph Abate wrote in a report to clients. "We believe this exceeds the risks of maintaining reserves slightly above the necessary level."