Economy

SHANGHAI (Reuters) – China’s top European business group warned on Wednesday that its “zero-COVID” strategy was harming the attractiveness of Shanghai as a financial hub, echoing analysts voicing caution over the mounting economic toll of the country’s coronavirus curbs. China has for the past month been tackling multiple outbreaks with an elimination strategy that seeks to test, trace and centrally quarantine all positive COVID-19 cases.Nomura estimated on Tuesday that a total of 23 Chinese cities have implemented either full or partial lockdowns, which collectively are home to an estimated 193 million people and contribute to 22% of China’s GDP.The European Union Chamber of Commerce in China said that the strategy was causing growing difficulties transporting goods across provinces and through ports, harming factory output.Chamber President Joerg Wuttke told a media roundtable that this would likely impact China’s ability to export, which could eventually stoke inflation. “In China, COVID is still associated as if it were the plague. I think there needs a bit more education from the Chinese authorities, to take the fear away in order to make people more comfortable to live with this kind of uncertainty,” he said on Wednesday.TRAVEL RESTRICTIONSChina, which has severely restricted international travel for the last two years, shows little inclination to ease up on its approach for now. On Wednesday, Wu Zunyou, chief epidemiologist at the Chinese Center For Disease Control and Prevention, said that the epidemic situation would improve soon if China strictly implements existing COVID measures.A handful of economists have lowered growth forecasts for the first half of 2022, as the COVID surge, coming amid persistent property weakness and global uncertainties, makes it harder for China to hit its full-year target of around 5.5%.Shanghai-based Bank of Communications cut its forecast for China’s first-quarter GDP growth from 5% to 4%, with the drop coming solely from slowing activity in March, said senior economist Tang Jianwei. Shanghai has put strict movement curbs on its 26 million residents, barring them from even leaving their front doors other than for COVID tests.Dan Wang, chief economist at the Hang Seng Bank China in Shanghai, said the primary ripple effect for now from the city’s lockdown was in the financial and legal services sector.For example, companies looking to go public typically have to work in person with legal teams based in Shanghai – but current travel restrictions make that impossible.”Macro confidence will collapse if this lockdown continues like this, and it will be reflected in the stock market,” she said. “I expect monetary easing happening pretty soon in the second quarter.” More

ATHENS (Reuters) -Thousands protested in Athens on Wednesday during a day-long nationwide strike over what workers call a “deepening crisis” of rising prices and squeezed incomes, disrupting transport, ferries, schools and public hospitals.The country’s two biggest labour unions, representing about 2.5 million public and private sector workers, called the general strike that culminated in a rally outside parliament.For many of those there, everyday life has become unaffordable.”Our life now is just being in debt,” said Georgios Alexandropoulos, a 60-year-old courier worker.”I owe the electricity company and my landlord, I’m two months behind in rent, and I owe the last two electricity bills. Soon we will be in debt to everyone…we can’t go on like this.”Another protester, 57-year-old psychologist Michalis Tokaras, said he was forced to “cut back on everything”.”We have to choose between paying our mortgage or paying bills. We’ve reached the bottom,” he said.Police estimate at least 10,000 people turned up for the rally. “We won’t compromise with inflation,” one banner read. Greece emerged from a decade of financial crisis in 2018, only for the coronavirus pandemic to bring global travel to a standstill two years later, hurting its vital tourism industry. Now, soaring energy prices, exacerbated by sanctions against Russia since its invasion of Ukraine in February, have further hurt workers’ pockets.”For the last 14 years, workers have been carrying the burden of a deep crisis that has affected everyone’s incomes and lives,” said GSEE, the country’s umbrella private sector union.”As the years go by the crisis is constantly deepening, the burdens remain, our rights are shrinking.”Greece’s annual consumer inflation surged to a 25-year high of 7.2% in February on the back of rising energy, housing and transportation costs.The government has spent about 3.7 billion euros ($4 billion) since September to alleviate the burden of rising energy and fuel costs for farmers, households and businesses.GSEE said in March it had proposed a 13% increase in the monthly gross minimum wage to 751 euros due to inflation.The conservative government raised the minimum wage by 2% to 663 euros in January and Prime Minister Kyriakos Mitsotakis has promised a second, larger increase from May 1.For the striking workers, the measures do not go far enough.”Recently, our salaries – for those of us who have jobs – last for only half a month’s worth of expenses,” said Christos Katsikas, a 60-year-old school teacher.($1 = 0.9191 euros) More

The value of global trade fell 2.8 per cent between February and March as Russia’s invasion of Ukraine led to a sharp drop in container ship traffic from the two countries, according to the Kiel Institute for the World Economy.The data from the German research body are the first to indicate how much the conflict in Ukraine and extensive sanctions imposed on Russia by the west have hit global trade since the invasion started on February 24.The biggest impact was on trade with Russia, as the value of imports into the country fell 9.7 per cent in March from the previous month, while exports fell 5 per cent, according to the Kiel Institute. Its indicator tracks shipping data from 500 ports in real time, seasonally adjusting the value of exports and imports, to offer a measure of trading activity.“Real distortions caused by Russia’s invasion of Ukraine and the sanctions imposed by the west, as well as a high level of uncertainty among companies with relations to Russia, are noticeably setting back March trade,” said Vincent Stamer, head of Kiel Trade Indicator.Shipping container traffic halved in the past month at St Petersburg, Vladivostok and Novorossiysk, Russia’s three busiest container ports, because of the sanctions imposed on the country and the withdrawal of many western brands, the institute said. Ukraine’s main port at Odesa on the Black Sea has been “practically cut off from international maritime trade”, it added.The war in Ukraine had a chilling effect on EU trade, reducing exports from the bloc by 5.6 per cent in March and imports by 3.4 per cent. The impact on the US was milder, with its exports falling 3.4 per cent and imports dipping 0.6 per cent.By contrast, the impact on China was negligible, as its exports fell 0.9 per cent last month, while imports grew 0.9 per cent. Beijing has been more supportive of Russia’s invasion of Ukraine than the west and has not backed international sanctions on Moscow.China’s zero-Covid lockdowns have so far had little impact on port traffic in Shanghai and other cities, but they did increase container ship congestion, the institute said. About 12 per cent of all goods shipped worldwide were stuck on stationary ships — a figure surpassed only for two months last year.The figures tie in with separate data compiled monthly by JPMorgan and rating company S&P, which showed the global exports purchasing managers’ index dropping to 48 in March, down from 51 the previous month and the lowest since July 2020, when many countries had stringent coronavirus restrictions in place. This was also below the 50 mark, which indicates a majority of businesses reporting a contraction in exports compared with the previous month.The downturn in global manufacturing exports was geographically widespread, the PMIs showed, with two-thirds of the countries surveyed reporting a contraction.The war has disrupted supplies of staple resources and commodities such as maize, wheat, potash, neon gas, nickel and palladium from Russia and Ukraine, two of the world’s biggest producers of these commodities, pushing up energy and food prices and crimping production at several car and truckmakers.

The pressure on trade could increase as the US and EU are preparing a new round of sanctions against Russia in response to allegations of atrocities committed by the Russian military in Ukraine, including in towns near Kyiv.The EU plans to target Russian coal imports, widen its restrictions on the country’s banking sector and impose export bans worth €10bn in areas including quantum computers and advanced semiconductors and bans worth €5.5bn on products including wood, cement, seafood and liquor.Washington, which is co-ordinating its action against Moscow with other G7 and EU countries, is poised to ban new investment in Russia while increasing sanctions on the country’s financial institutions, state-owned enterprises and government officials. More

Cairo-headquartered Afreximbank said its Ukraine Crisis Adjustment Trade Financing Programme for Africa was approved by its board at the end of March.It said the fund would extend to areas such as oil and metals buy-back financing, commodity export revenue stabilisation and tourism revenue deficit financing.”Given the importance of both Russia and Ukraine as sources of crude oil and gas, raw materials and grains, the outbreak of the conflict has wider repercussions on a global scale, including adversely affecting African economies, especially those that rely heavily on grain, fertiliser and fuel imports,” it said in a statement. The two countries account for around 29% of global wheat exports, 19% of world corn supplies and 80% of world sunflower oil exports.The bank said it had already received financing requests exceeding $15 billion.”There is some urgency to meet these requests to avoid catastrophic social conditions across Africa and reduce the risk of their morphing into political challenges,” it said. More

The US and EU are to unveil new sanctions against the business associates of Vladimir Putin and the Russian economy following a call by Volodymyr Zelensky for those guilty of war crimes in Ukraine to be “brought to justice”.The US is poised to broaden a ban on new investment in Russia’s energy sector while increasing sanctions against the country’s financial institutions, state-owned enterprises and government officials.The EU is to unveil fresh sanctions on some of Vladimir Putin’s closest business associates. Two of Putin’s daughters are also to be added to the list of people hit by EU asset freezes and travel bans, according to a draft document seen by the Financial Times. The new measures must be approved by EU ambassadors before being made public.The US and EU are planning to co-ordinate the announcements which come a day after Ukraine’s president demanded a system of justice akin to the Nuremberg trials be established to prosecute those responsible for killing unarmed citizens in Ukraine.Zelensky spoke to the UN Security Council yesterday after he visited the town of Bucha on the outskirts of Kyiv on Monday, following reports of a civilian massacre in the town close to the Ukrainian capital.He also blasted the Security Council for failing to prevent the Russian invasion of Ukraine.“If tyranny had received a response, it would have ceased to exist,” he said.Since Zelensky’s speech, evidence has emerged of fresh atrocities and makeshift civilian graves in the towns of Irpin and Borodyanka, on the outskirts of Kyiv, which last week were liberated by Ukraine’s army. The US and its allies have imposed severe sanctions against Russia since its invasion of Ukraine. The US has already banned new investments in Russia’s energy sector, but the step expected to be announced today would apply the prohibition across the Russian economy. The EU this week moved to ban Russian coal and other measures to further reduce its dependence on energy imports from Russia.The latest on the war in Ukraine: Sanctions: Italy and Spain led a fresh round of European expulsions of Moscow’s diplomats, taking the total to more than 90.Disinformation: Russian state media are bombarding citizens with alternative versions of the truth and denying accusations of war crimes in Ukraine while the US is leading efforts to publicise Ukraine’s intelligence. Military briefing: Nato’s “eyes in the sky” keep watch as war rages, while the Czech Republic is sending tanks to bolster Ukraine’s forces.Opinion: It is a tasteless thing to argue, and perhaps even to think, but America will be the ultimate “winner” of the Ukrainian crisis, writes Janan Ganesh. Martin Wolf makes the powerful argument for curbing the imports of Russian gas, not just oil and coal. Follow our live blog for the latest news on the conflict and our regularly updated maps are tracking Russia’s invasion of Ukraine. Thanks for reading FirstFT Americas. Here’s the rest of today’s news — GordonFive more stories in the news1. Fed to begin ‘rapid’ balance sheet reduction Lael Brainard, who sits on the Federal Reserve’s board of governors, said yesterday that the US central bank could begin the reduction of its $9tn balance sheet as soon as its next meeting in May. She also said the Fed is prepared to take “stronger” action when it comes to raising interest rates in order to bring down inflation.2. US, UK and Australia to co-operate on hypersonic weapons The allies are to work together to develop hypersonic weapons, expanding a trilateral security pact designed to help Washington and its allies counter China’s rapid military expansion. China and Russia have led in the development of these weapons which fly at more than five times the speed of sound.3. Oklahoma passes one of the toughest anti-abortion laws in the US The bill passed by the House of Representatives in the Republican-led state would make it a felony to perform abortions except in cases of life-threatening medical emergencies. Punishments would include fines of up to $100,000 and imprisonment for as long as 10 years.4. Uber adds planes and trains in ‘superapp’ push The ride-booking app is aiming to add long-distance bookings to its UK app this year, including intercity trains, coaches and flights, as it reboots chief executive Dara Khosrowshahi’s long-delayed plans to become a broader travel hub.5. Le Pen’s poll surge rattles French bonds and bank stocks The risk of a victory for Marine Le Pen came into sharp focus yesterday as polls ahead of the first round of voting on Sunday showed the far-right candidate gaining ground on president Emmanuel Macron. Bank stocks fell and bond spreads between French and German government debt widened. The day aheadNato foreign ministers meet The Biden administration said it would send another $100mn in military equipment to Ukraine, which is expected to include Javelin anti-tank missiles, on the eve of a meeting of Nato foreign ministers in Brussels.Federal Reserve minutes: The Federal Open Market Committee’s minutes from its March 15-16 policy meeting, where it decided to raise interest rates for the first time since 2018, will be released today. The minutes should provide insight into the debate over the pace of interest rate increases to combat inflation and its attempt to reduce the balance sheet. Earnings Jeans retailer Levi Strauss & Co is expected to report revenues of $1.5bn in the first quarter, according to analysts polled by Refinitiv. Strong demand for casual clothing has boosted demand, as some consumers still work from home. Canada’s largest cannabis producer Tilray is also reporting earnings results today.MBA Mortgage Applications: The Mortgage Bankers Association will release its weekly index indicating the number of mortgage applications for the week ended April 1. Last month, applications declined 6.8 per cent, as mortgage rates increased. Axiom launch Axiom (or Ax-1), the first all-private astronaut rocket mission to the International Space Station, is due to launch from Nasa’s Kennedy space centre in Florida.What else we’re readingThe weaponisation of finance The first of a two-part series on the new era of financial warfare examines how the west unleashed “shock and awe” on Russia’s economy, and how sanctions on the country’s central bank wielded the omnipresence of the US dollar to penalise an adversary of Washington.A new kind of media baron charges into Twitter Elon Musk’s investment in the social media platform and subsequent appointment to the company’s board of directors gives the Tesla chief executive a unique position and influence normally associated with traditional press barons. Tech reporters Hannah Murphy and Richard Waters spoke to experts about this week’s surprise developments.Carbon removal ‘unavoidable’ as climate change alarm bells ring Once a fringe idea, carbon capture and storage has become a key part of decarbonisation plans the world over. Supporters argue that we need a way to remove CO2 already in the atmosphere to stay below 1.5C of global warming. But does this technology risk providing big polluters a licence to carry on as normal? The FT weighs the pros and cons.Australia should blame itself for Solomon Islands’ shift to China Dismay in Australia, New Zealand, the US and Japan over a planned security pact overshadows long-running problems in their approach to the Pacific, writes Kathrin Hille — and shows how despite fears of losing influence, the west is struggling to do anything about it.Can David Solomon DJ? An investigation A chief executive’s public image can have demonstrable effects on corporate culture and share price performance. The Goldman Sachs chief executive’s elevation from weekend mix-jockey to festival headliner carries a measurable risk of being considered too eccentric. So it is on behalf of stakeholders that Alphaville asks: is Solomon any good?FitnessBoost your ride with investment-worthy cycle hacks from 3D-printed saddles to Tour de France-tested wheelsets, Fergus Scholes rounds up the 14 best bike upgrades.

Princeton Carbonworks PEAK 4550 Wheelset, from $3,000 More

Investing.com — Bond markets are under pressure again. U.S. yields are at three-year highs after the Fed’s Lael Brainard warned of a faster tightening of policy, while the Eurozone’s are spooked by the prospect of Marine Le Pen winning the French presidency later this month. Stocks are set to open lower, with JetBlue’s rival offer for Spirit Airlines (NYSE:SAVE) providing the day’s main M&A action. China’s services sector had a wretched March due to Covid-19, and oil prices are up as Big Oil executives prepare for a grilling in Congress from worried Democratic lawmakers. Here’s what you need to know in financial markets on Wednesday, 6th April.1. Bonds under pressure after Brainard comments; DB forecasts a recession in 2023Bond markets are front and center again a day after Lael Brainard, President Joe Biden’s nominee as vice-chair for the Federal Reserve, warned of a “rapid” reduction of the Fed’s balance sheet as early as May.Reacting to the comments, Deutsche Bank (DE:DBKGn) DBKGn became the first major bank to call a U.S. recession in 2023, caused by the tightening of monetary policy.Benchmark 10-Year Treasury yields hit their highest in three years after Brainard warned of the “paramount” need to bring inflation down, using both interest rates and quantitative tightening. After a modest consolidation, they rose again overnight to stand within 1 basis point of Tuesday’s high of 2.63%.More detail on the Fed’s discussion of the interplay between interest rates and quantitative policy is likely to emerge when the Fed publishes the minutes of its March meeting at 2 PM ET (1800 GMT).2. Eurozone markets rattled by Le Pen progressBond markets in the Eurozone are also under pressure, but from a different angle. The chances of Marine Le Pen winning the French presidential elections this month have risen sharply in recent days, as the far-right, anti-EU leader has capitalized on the drop in living standards due to soaring inflation.Macron has seen his lead over Le Pen in a two-way contest shrivel from 15 percentage points to barely 3 points in the last month. The first round of voting is due on Sunday.The spread between the 10-Year French and German bond yields, a barometer of political risk at the heart of the Eurozone, widened to 46 basis points, its widest in more than three years.As with the U.S., inflation fears are also haunting European bond markets. Eurozone producer prices rose 31% year-on-year in February, albeit due largely to supply squeezes rather than to overheating demand.3. Stocks set to open lower; JetBlue’s bid for Spirit in focusU.S. stock markets are set to open lower again after falling sharply on Tuesday in reaction to comments from Brainard and Kansas City Fed President Esther George, who also warned of the need for a faster tightening of monetary policy.By 6:15 AM ET, Dow Jones futures were down 195 points, or 0.6%. S&P 500 futures were down 0.7% while Nasdaq 100 futures were down 1.0%. The three main cash indices had fallen by between 0.8% and 2.3% on Tuesday.Stocks likely to be in focus later include Spirit Airlines, after JetBlue crashed Frontier Airlines’ (NASDAQ:ULCC) party with an all-cash bid for the discount flyer.AT&T (NYSE:T) and Discovery (NASDAQ:DISCA) are also likely to gain attention after WarnerMedia CEO Jason Kilar and Ann Sarnoff, CEO of WarnerMedia Studios and Networks, both said they will step down ahead of the planned merger of Discovery with AT&T’s media assets.4. Wretched March for the Chinese economyChina’s services sector followed the country’s manufacturers into contraction territory in March as ever-broader lockdowns damped the hospitality and travel sectors.The Caixin Services PMI fell to 42 in March, its lowest since April 2020 and well below the 50 line that separates growth from contraction.Money spent by tourists during the Qingming holiday weekend fell to less than 40% of pre-Covid levels, according to official estimates, while economists at Nomura noted that around 193 million people – accounting for some 22% of China’s GDP – are currently affected by public health measures of varying degrees of severity. That includes a near-total lockdown of activity in Shanghai.5. Big Oil in Congress; EIA inventories dueBig Oil representatives are to testify in Congress later to give assurances that they are not exploiting this year’s surge in crude prices to indulge in price gouging. Exxon Mobil (NYSE:XOM) Chair Darren Woods and Chevron (NYSE:CVX) CEO Mike Wirth are both likely to face a grilling from Democratic lawmakers who risk losing their control of both houses of the legislature in this year’s midterms due to popular anger at rising prices and squeezed living standards.  By 6:25 AM ET, U.S. crude futures were up 1.6% at $103.55 a barrel, while Brent futures were up 1.5% at $108.15 a barrel. Both contracts were reacting to talk out of Europe expressing discontent at the mildness of the bloc’s latest sanctions package. The EU’s top diplomat Josep Borrell noted that the bloc has sent Russia 35 billion euros in payments for energy since it invaded Ukraine, compared to only 1 billion euros to Ukraine itself. The U.S. government’s weekly stockpiles data are due at 10:30 AM ET, a day after the American Petroleum Institute’s numbers showed the first rise in crude stocks in three weeks. More

Taiwan has condemned Russia’s attack and already joined the Western-led sanctions effort, though it is largely symbolic as there is only minimal direct trade between the island and Russia.Taiwan’s Cabinet said in an announcement that any companies wishing to export a long list of tech-related goods to Russia would need to seek permission.The move has been made “in order to prevent our country from exporting high-tech goods to Russia for the production of military weapons”, the Cabinet added.The list includes equipment for making semiconductors, the production of which Taiwan is a world leader in, as well as lasers and navigation systems. The Economy Ministry added in a separate statement that it “urges industry to follow the export control laws, conduct due diligence before exporting, and avoid exporting products from the ‘Russian export list’ that can be used for weapons proliferation to Russia without approval”.It said it had produced the list based upon what other allied countries were doing and that in total it covered 57 “controlled items”.A U.S. official said last week that Taiwan’s TSMC, the world’s largest contract chipmaker, had exited the Russian market, cutting off the Moscow Center of SPARC Technologies’ access to Elbrus chips, which are widely used in Russian intelligence and military systems.Ukraine’s plight has won broad public sympathy in Taiwan due to what many people view as the parallels between what it happening in the European country and what could happen if China ever uses force to bring the island it claims as its own territory under Chinese control. More

WASHINGTON (Reuters) – U.S. Federal Reserve officials on Wednesday will release more details on what’s evolving as a three-year plan to trim several trillion dollars from the stash of assets purchased to stabilize financial markets through the coronavirus pandemic, its next step in the move to tighten credit and lower inflation.The reductions, which officials say could begin as soon as next month, were debated at the Fed’s March meeting, and minutes of that session released at 2 p.m. (1800 GMT) may indicate just how fast and how far policymakers will proceed in getting rid of the $4.6 trillion in U.S. Treasuries and mortgage-backed securities accumulated since March 2020.Rising interest rates on home mortgages, bonds and other longer-term debt are already accounting for the Fed getting rid of perhaps $80 billion to $100 billion of assets per month, economists say, so the immediate market response may be muted.But the plan will send a powerful signal of officials’ intent to make credit steadily more expensive and, by doing so, help lower inflation currently running at more than triple the Fed’s 2% target. The Fed “will continue tightening monetary policy methodically through a series of interest rate increases and by starting to reduce the balance sheet at a rapid pace as soon as our May meeting,” Fed Governor and Vice-Chair nominee Lael Brainard said on Tuesday. Referring to the 2017-2019 period when the Fed took a year to reach a pace of $50 billion in monthly reductions of its holdings, Brainard said “I expect the balance sheet to shrink considerably more rapidly” this time.Last month the central bank raised its target federal funds rate by a quarter percentage point, the first of an anticipated series of hikes this year and into next. Fed officials as of March projected six more quarter-point increases this year, and the minutes may also provide insight on that debate, which has already shifted in favor of larger half-point hikes at one or more of their upcoming sessions. Traders in federal funds futures contracts expect an aggressive Fed will use half-point increases at three upcoming meetings in what may be one of the fastest tightening cycles since at least the 1960s.For a related graphic on The Fed’s last windown: Treasuries, click https://tmsnrt.rs/3uWX0cf’FULLY PRICED’ Shrinking the balance sheet adds even more pressure to credit markets by decreasing demand for the assets that the Fed holds, which adds upward pressure on interest rates. While estimates of the impact vary, Fed Chair Jerome Powell after March’s meeting said the reductions might have the same effect as an additional quarter-point increase in the short-term rate the Fed uses as its primary tool.Lorie Logan, a top market official at the New York Fed, last month estimated that by not reinvesting the monthly payments it receives on its assets, the Fed could shed an average of $80 billion a month in Treasuries and $25 billion in MBS.Most analysts expect somewhat smaller amounts, but absent a major surprise in Wednesday’s minutes “the market is fully priced” for the Fed to reduce its balance sheet by perhaps $3 trillion over three years, said RSM chief economist Joe Brusuelas.Details of the plan and the language from Brainard and others, he said, at this point “appear to be aimed at keeping (inflation) expectations anchored” by following through on a shift officials have been publicly discussing since last fall.Powell laid out the broad contours of the plan when he told Congress last month the Fed would “in the range of three years” return its asset holdings to “a size relative to our economy that it was before” the pandemic.In response to the 2007-2009 financial crisis, the Fed through several rounds of “quantitative easing” accumulated around $4.2 trillion of assets, the equivalent of around 24% of U.S. gross domestic product. From 2017 to 2019 it reduced those holdings to less than $3.6 trillion, or about 16.5% of GDP.For a related graphic on QE, QT and GDP, click https://tmsnrt.rs/3x6ioOQ’IN THE BACKGROUND’More is in play this time. The Fed between March 2020 and March 2022 ran its Treasury and mortgage holdings up to $8.5 trillion, roughly 35% of GDP, a level some elected officials worried put the central bank too deeply into financial markets and government finance.As the Fed begins its withdrawal, economists expect it may end up targeting a balance sheet level equivalent to perhaps 20% of GDP, or around $6 trillion depending on how fast the economy grows and, perhaps more importantly, what level of reserves commercial banks require.Policymakers have said they do not want to repeat their mistake of 2019, when the balance sheet got so low it drove up the interest banks charge each other to borrow reserves overnight. That forced the Fed to put more cash into the system.”They want this to operate in the background so they will be very careful about the language they use,” said Andrew Patterson, senior international economist for Vanguard. Patterson said he thought the Fed would aim to reduce the balance sheet to around “20ish” percent of GDP, but may take four or five years to get there, a slightly slower pace than Powell flagged to Congress.Whatever the parameters set, New York Fed President John Williams said Saturday it will likely take a shock to the economy to change course once agreement is reached.”The idea at least during the initial phase is to have that operate in a very predictable way, in the background,” Williams said. For a related graphic on The Fed’s potential drawdown, click https://tmsnrt.rs/3LMHaI7 More