: The US Federal Reserve is scaling back, having already terminated purchases of government bonds and mortgage-backed securities, which at their peak provided more than $1trn a year in new funds to markets, according to The Independent. Currently, the Fed does not plan to sell its portfolio of about $4trn of securities. However, the world is entering a period of asynchronous monetary policy, with divergences between individual central banks which has the potential to destabilise the asset market. It continues to reinvest principal payments from its holdings of mortgage-backed securities and roll over maturing Treasury bonds. The withdrawal of Fed support will be offset, many have assumed, by the European Central Bank and Bank of Japan. But the Fed will not add significantly to liquidity.
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