The Federal Reserve announced a significant reduction in the pace of its balance sheet reduction, starting in June. The monthly redemption cap on Treasury securities will be lowered from $60 billion to $25 billion, which was more substantial than the anticipated change to $30 billion. The Fed will maintain the redemption cap for mortgage-backed securities at $35 billion per month and confirmed there will be no rate change. This move is seen as dovish and is aimed at moderating the decline of the Fed's securities holdings, which is a response to concerns about market stability. Additionally, this adjustment means $105BN less gross issuance needed in Q3, indicating that the Fed views current yields as too high.