[Toddsterpatriot]

Auf Englisch, this means... they will begin to contract the money supply

They've been reducing their balance sheet for months. All the PhDs in economics know that.

[April Lexington]

My point exactly, notice the puny GDP lately? How about some analysis, Toddster. Maybe some enlightenment? Or just more personal attacks from The Failed Obama Administration©?

Y'all losing big time lately!

[NVDave]

Well, to be accurate, they were reducing their balance sheet for months, esp. throughout February before the QE announcement. Since the QE announcement, their balance sheet has increased to about $2T, varying up and down a bit each week, but more importantly, the composition of the balance sheet has been changing.

They’re pulling money out of the TALF and swaps with other central banks, and they’re buying more Treasury, agency and RMBS paper. It is running about $2 tril, up slightly from the previous week.

For me, the $65,535.00 question will be what happens to the Treasury market when the Fed finishes their purchase of T’s sometime “in October...”?