It looks ugly for risk assets as it shrinks demand to fit constrained supply. Goldman:
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BOTTOM LINE: The March FOMC minutes revealed some of the key parameters of the balance sheet reduction process, including that the monthly cap would likely be set at $95bn—split $60bn-$35bn between Treasury and mortgage-backed securities—and that the caps would be phased in “over a period of three months or modestly longer.” The minutes also indicated stronger than expected support for a 50bp increase in the funds rate target range at the March meeting that was dampened by uncertainty related to the war in Ukraine. The minutes also indicated that participants judged it appropriate to move towards a neutral policy position “expeditiously.”