The Fed may announce the end of balance sheet reduction next week, and the supply of government bonds in the market will decrease.

According to Mars Finance news, reported by Jin10, economists at research firm Wrightson ICAP pointed out that signs of funding pressure in the repo market may prompt the Fed to announce next week that it will no longer continue to reduce its bond holdings in its interest rate decision. Fed Chairman Powell has indicated that he is waiting for the right moment to end the balance sheet reduction, and it is expected that the Fed will begin purchasing U.S. Treasuries to offset maturing collateralized mortgage obligations, thereby maintaining the overall stability of its balance sheet size. As the Fed shifts to a neutral policy stance, the supply of short-term government bonds in the market may decrease by about 20 billion dollars each month.