US Fed shrinking balance sheet at a much slower pace than planned earlier

As a result, the yield 10-year US government bond is down 14 per cent in the last seven weeks while the S&P 500 up 11.3 per cent in the period

The stock market's worst fears of a "too" hawkish monetary stance by the US Federal Reserve has turned out to be unfounded. The American central bank is shrinking its balance sheet at a much slower pace than planned earlier which has kept the liquidity conditions in the market much more benign.  

The Fed balance sheet has shrunk by just $75.5 billion or 0.84 per cent from its peak in April this year. Early this year, the Federal Reserve announced a plan to shrink its balance sheet at a rate of $47 billion per month in the first three months beginning