Taper Update

As most market participants are aware, the Federal Reserve has been following a very strict taper schedule which is modeled out in the chart below. What may be underappreciated is the fact that through April 25th, the Fed's balance sheet has risen by nearly $273 billion year-to-date. If the Fed continues on their taper schedule that means the Fed's balance sheet will "only" rise by about $196 billion for the remainder of the year or put another way the Fed's balance sheet will increase by 28% less than what it has already gained year-to-date.