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Fed signals cuts to balance sheet, intensifying tightening

Rebuke to surging stock prices further splits US, peers on policy

WASHINGTON -- The Federal Reserve is looking to begin paring down massive asset holdings by the end of the year, widening the policy split from other central banks still leaning toward easing.

Most participants at a meeting of the Federal Open Market Committee on March 14-15 agreed that it would probably be appropriate for the Fed to change its policy of reinvesting proceeds from matured bonds and mortgage-backed securities "later this year," according to minutes released Wednesday. Reinvestment has let the Fed maintain the size of its asset stockpile since ending quantitative easing. Halting that process would remove an enormous buyer from the bond market.

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