Fed's Quarles: Fed has discussed ending balance sheet runoff in latter half of this year
|Head of Supervision at the Federal Reserve (Fed) Randy Quarles has recently delivered below-seen comments on the Fed's balance sheet strategy.
- Appropriate to keep balance sheet big enough to buffer against most shocks to reserve supply.
- On the few days when buffer is exhausted, Fed could do open market operations to boost reserve supply.
- Fed has discussed ending balance sheet runoff in latter half of this year.
- One option at that point would be to hold level of total assets fixed for a time
- Favors a return to all-treasuries fed balance sheet.
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