It has begun (finally). The Federal Reserve becomes aggressively passive in letting UST and MBS roll off, slowly. Impact on rates will be small (at first), but may become material.
"This week Janet Yellen, Federal Reserve chair, provided some long-awaited guidance about how the Fed will unwind its monetary policy experiments with its balance sheet. This did not generate nearly as many headlines as this week’s other Fed announcement: a 25 basis-point rise in the federal funds rate. No wonder. Voters and politicians can recognise a rate increase. The Fed’s balance sheet, however, is a deeply mysterious thing, even for policy geeks."