Fed again decides not to reduce rates, will reduce balance sheet instead

As the Federal Reserve announced for the sixth straight month that interest rates will remain unchanged, the agency signaled its plans to shift its approach to tackling inflation. This will entail reducing the amount of Treasury securities held on its balance sheet through a process commonly referred to as quantitative tightening. Fed Chair Jerome Powell offered a detailed explanation of the decision, and Mortgage Bankers Association Chief Economist Michael Fratantoni commented on the implications.