Longer duration, risk assets, much larger balance sheets are used by global central banks to recover from a financial recession that occurred more than a decade ago. What will happen in the next recession? What will history books say about this “adventure” in monetary policy?
"While many market participants have focused on the end of balance sheet normalization as one sign of a more accommodative Fed, we believe the duration profile of the Fed’s holdings is being overlooked. Figure 1 plots the dollar size amount of the Fed’s balance sheet against the duration of its holdings using 5- and 10-year equivalents."