US debt ceiling fight could derail Federal Reserve balance sheet plans

Bloomberg with a take on the Federal Open Market Committee announcement, focusing on risks to the plan to reduce the balance sheet

• The Federal Reserve signaled it intends to kick off the reduction in its $4.5 trillion balance sheet in September

But ...

• A looming deadline for raising the government's debt ceiling could end up complicating the Fed's plans if it significantly disrupts financial markets, particularly for U.S. Treasury securities
• "September is the most likely outcome" for the launch of the balance-sheet drawdown, said Lou Crandall, chief economist at Wrightson ICAP LLC in Jersey City, New Jersey. "But I can't rule out the idea that they would wait until November if the debt ceiling really looks messy."

The Bloomberg piece is here for more

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I posted earlier on Barclays' take on the FOMC announcement, they made pretty much the same point:

• The committee ... "expects to begin implementing its balance sheet normalization program relatively soon." ... "relatively soon" gives the committee flexibility to delay any announcement on the balance sheet should the debt ceiling, or other fiscal policy concerns, rattle markets ahead of the September meeting.