Forward Guidance · Monday, August 3, 2026
There's a discussion about the Federal Reserve's balance sheet policy and its impact on long-end yields. The sentiment is that a core question posed to the committee was how much accommodation the Fed's balance sheet is providing, with the potential to let the long end of the curve price to fair market value.
“I think the level of, I guess clearly the communication was was uh, needs some work because if you've read his comments, his writings, his speeches, his talks over last, you know, multiple years.”
“A core question I posed to the committee and our task forces is, how much accommodation is the Fed's balance sheet providing the market? And monetary policy. And it's obviously a lot because you have a record flat, record flat yield curve.”
“And so he was basically saying that he wants to let the balance sheet, take the Fed's footprint from the balance sheet, the treasury market, and let the long end of the curve price to fair market value.”