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Fed's Schmid (2028 voter) says main focus of Fed balance sheet debate is about size of reserves; concerned about duration of Fed balance sheet

Fed's Schmid emphasizes that the focus of the balance sheet debate centers on the size of reserves, reflecting a long-term commitment to a lower balance sheet size than pre-crisis levels.

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US sells USD 28bln of 2-year FRNs at a high discount margin of 0.099%

European Closes: Euro Stoxx 50 +0.91% at 6,172, Dax 40 +0.74% at 25,171, FTSE 100 +1.18% at 10,806, CAC 40 +0.47% at 8,559, FTSE MIB +1.11% at 47,170, IBEX 35 +1.49% at 18,461, PSI +0.29% at 9,296, SMI -0.10% at 13,983, AEX +1.00% at 1,030

Fed's Schmid (2028 voter) says main focus of Fed balance sheet debate is about size of reserves; concerned about duration of Fed balance sheet

The TJX Companies (TJX) executive says company is monitoring changing tariff environment, annual guidance assumes they will offset tariff pressure, according to conference call

Russia may cut the budget rule oil price to as low as USD 45-50/bbl

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  • Fed mortgage holdings have lowered yields there.
  • It will take years for the Fed to run off mortgage bond holdings.
  • Never returning to Fed balance sheet size seen before financial crisis.
  • Appreciates that Warsh, if confirmed as Fed chair, would come with experience.
  • Politics do not enter Fed policy debates, independence leads to better decisions; last year's dissents were not done lightly
  • T-bill reserve management buying is relatively modest.
  • We are in a pretty good place for the job market.
  • We have work to do on inflation side of Fed mandate.
  • Fed response to market trouble would depend on cause.
  • Fed is attentive to, but not preoccupied by, market conditions.
Context

His comments signal that while the Fed is keeping an eye on market dynamics, it remains concentrated on inflation targets and labor market conditions, suggesting a cautious, data-driven approach to policy without heavy political influence.

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