The benchmark 10-year Treasury yield ticked higher Wednesday after the Federal Reserve released a summary of its key December meeting. The 10-year traded at 1.7%, its high of the day, up about 3 basis points. The 2-year rate jumped by 5 basis points to 0.82%. … The minutes released Wednesday showed that Fed officials began plans to start reducing the amount of bonds it is holding on its balance sheet. Some officials even said that the balance-sheet reduction could start sometime after the Fed starts raising interest rates. The Fed is tapering its bond purchases now and has already indicated to the market that it will raise rates soon after it finishes that taper in March. But the market is awaiting indications from the Fed on what it would do with its balance sheet once it’s done increasing it. The minutes showed officials considering to shrink the balance sheet along with raising rates as another way to remove policy accommodation.
Source: CNBC – Bonds
