MetLife Expects Fed to Announce a Balance Sheet Reduction

The video discusses a significant Federal Reserve meeting focusing on both actions and statements. It covers the expected reduction of the Fed's balance sheet, starting October 1, and the potential risks involved, drawing parallels to the 2013 taper tantrum. The discussion highlights differences from past QE policies, emphasizing the Treasury's role in funding securities and its impact on market supply. The video concludes with an analysis of market assumptions and the potential effects of increased Treasury issuance.

What is the implication of the Treasury needing to fund securities when the Fed does not roll them over?

What assumption is made about the Treasury's actions in relation to the Fed?