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REDWOOD CITYFor the Quarter Ended March 31, 2017 Market Update2017 PFM Asset Management LLCAfter multiple rounds of quantitative easing, the Federal Reserve’s balance sheet has swelled from under $1 trillion toapproximately $4.5 trillion.March meeting highlights: “participants agreed that reductions in the Federal Reserve’s securities holdings should be gradual andpredictable, and accomplished primarily by phasing out reinvestments… Most participants anticipated that gradual increases inthe federal funds rate would continue and judged that a change to the Committee’s reinvestment policy would likely beappropriate later this year.”$0$1$2$3$4$5200220032004200520062007200820092010201120122013201420152016(trillions)Total Balance Sheet Assets of the Federal ReserveTreasuryMortgage-BackedFederal AgencyOtherQE3$0$100$200$300$400$5002017201920212023202520272029203120332035203720392041204320452047(billions)Maturity Distribution ofBalance Sheet AssetsT-Notes & BondsMBSAgencyFOMC Meeting Focus: Fed’s Balance SheetQE2Source: The Federal Reserve, FRB of St. Louis, as of 03/29/17.176.1.A. - Page 28