At least for the time being.
Tom Petruno for the LA Times notes:
The Fed may be slow to consider more stimulus for another reason: It still will be reinvesting the proceeds from its total $2.6-trillion securities portfolio in more Treasuries. And the central bank seems certain to keep short-term interest rates near zero for the time being. So in Fed parlance, policymakers remain very "accommodative" for growth.
Readers are left to wonder just how much money is involved when the Fed reinvests "the proceeds from its total $2.6-trillion securities portfolio."
According to the Federal Reserve, here, the earnings of the Fed in 2010 break down as follows:
The Reserve Banks reported comprehensive income of $81.7 billion in the year ended December 31, 2010, up from the year prior.
Total comprehensive income included interest earnings of $44.8 billion on the federal agency and government-sponsored enterprise (GSE) mortgage-backed securities (MBS) holdings,
$26.4 billion on holdings of U.S. Treasury securities,
and $3.5 billion on holdings of government-sponsored enterprise debt securities.
In addition, total comprehensive income included interest income of $3.5 billion on loans to depository institutions and others.
The consolidated LLCs contributed to the Reserve Banks’ comprehensive income, with net earnings of $7.6 billion for the year ended December 31, 2010. ...
Net earnings from the [System Open Market Account] portfolio were approximately $76.2 billion; most of the earnings were attributable to interest income on Treasury securities and federal agency and GSE MBS.
So compared to the QE2 program of $600 billion in purchases, the Fed's intention to reinvest the proceeds of about $75 billion annually in like instruments represents a continuation of the program, but scaled back by roughly 85 percent.
Various scenarios for the unwinding of the Fed's massive balance sheet are discussed here.
