Fed sets end of balance sheet reduction for September

The Federal Reserve's program to reduce the bonds it holds on its balance sheet will end in six months, in a move being closely watched by financial markets.

Under the current program, it is allowing $30 billion in Treasury proceeds and $20 billion from mortgage-backed securities to roll off, while reinvesting the rest. The announcement comes amid months of hang-wringing on Wall Street over how much more the Fed will reduce its balance sheet, composed mainly of bonds it purchased during and after the financial crisis. The process, known as quantitative easing, was considered key in helping stimulate financial markets and lower longer-term interest rates.

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