CIBC Strategists Expect Fed Balance Sheet Reduction Plan by End of 2026, Runoff to Begin Q4 2027

According to CIBC strategists including Michael Cloherty, the Federal Reserve is expected to announce a plan to reduce its balance sheet by end of 2026, followed by a public comment period extending to Q2 2027. The actual balance sheet runoff is projected to begin in Q4 2027. The strategists anticipate the reduction process will be gradual and limited, with a slower pace compared to the Fed's previous balance sheet unwinding efforts.
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