Edward, apologies for showing ignorance but it would be a great help to me and friends here in UK if you could explain the book keeping of “The Fed will continue to let $50 bln a month of maturing assets roll-off the balance sheet.” Assuming Treasuries, from what account do the Reserves come from to redeem the bonds and to what account are those Reserves credited.
A must-read for Fed balance sheet dynamics esp. as relates to the unofficial policy shift to=> IOR (Interest On Reserves) instead of Fed Funds Rate -
https://www.hoover.org/sites/default/files/research/docs/17102-plosser.pdf
Thank you for responding and pointing us in direction of the Hoover/Plosser article.
Edward, apologies for showing ignorance but it would be a great help to me and friends here in UK if you could explain the book keeping of “The Fed will continue to let $50 bln a month of maturing assets roll-off the balance sheet.” Assuming Treasuries, from what account do the Reserves come from to redeem the bonds and to what account are those Reserves credited.
David, see comment above