Yellen: Fed’s bond holdings to drop only gradually

Published May 8, 2014 5:00pm ET



WASHINGTON (AP) — Federal Reserve Chair Janet Yellen said Thursday that the Fed’s bond holdings will likely remain at high levels for up to eight years after it starts raising short-term interest rates.

Yellen made clear that the Fed’s investment portfolio, now at a record $4.3 trillion, will decline only gradually. She said it could take five to eight years for the portfolio of Treasury bonds and mortgage-backed securities to return to the level in 2008 before the Fed began aggressively buying bonds.

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