Listen,do you want to know a secret
Do You promise not to tell,whoa,oh
Closer,let me whisper in your ear
Say the words you long to hear (The Beatles)
Yesterday’s blog post addressed Boston Fed President Eric Rosengren’s interview with Jon Hilsenrath and New York Fed President William Dudley’s effort to communicate how the FED plans to deal with a bloated balance sheet in a “rising interest rate” environment. Today’s FOMC minutes from the April 29-30 meeting addressed just that. The Fed’s uncertainty in its methods has resulted in the need for Janet Yellen to get out front in explaining to the public, and, especially the markets, about the difficult task ahead in shrinking its balance sheet. The closed meeting of the Fed Governor’s ahead of the scheduled conclave was to discuss among a small group of Fed officials the tools that the System Open Market Account (SOMA) had been contemplating and testing.