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financialpost.comA Federal Reserve official said reducing banks' demand for reserves would offer a smoother route to shrinking the central bank's balance sheet than cutting the supply of reserves. The official also noted potential stability benefits from maintaining a large balance sheet.
pbs.orgA Federal Reserve governor on Thursday opposed ideas to reduce the central bank's balance sheet. The governor said such moves would be wrong and could threaten financial stability. The comments come amid ongoing discussions about the size and role of the Fed's holdings.
Recent statements indicate that the Federal Reserve's balance sheet should be smaller and not include long-term treasuries or assets. No specific size has been fixed, but any regime change would need to be well-orchestrated. These views were shared in financial discussions on the…
Substrate placeholder — needs reviewFederal Reserve official Daly indicated that changes in bank capital requirements could lead to reduced demand for reserves. This might result in a smaller Federal Reserve balance sheet. The statements highlight potential shifts in monetary policy dynamics.