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The Fed maintained its target range for the fed funds rate at 1.00-1.25% and announced the start of the balance sheet normalization process at the 20 September monetary policy meeting. In line with its “Policy Normalization Principles and Plans” introduced back in June, the balance sheet drawdown will begin in October with monthly caps of $10bn initially, rising by $10bn every three months until they reach a limit of $50bn. Should the Fed follow that path, the balance sheet is estimated to shrink from $4.5tn currently to ca. $2.8tn by the end of 2020.