Fed officials reveal further details of balance sheet plans
Fed discusses letting assets fall off its balance sheet at the same pace as economic expansion
The Federal Reserve is discussing keeping the balance sheet at a fixed size after formally ending its quantitative tightening programme, vice-chair Randal Quarles said on February 22.
The move would see the non-reserve liabilities portion of the balance sheet grow in line with the economy, while the assets held under the QE facility fall at a pace that keeps the size of the balance sheet constant.
“This plan would substantially reduce the pace of the decline in reserves, allowing us to
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