Fed’s Balance-Sheet Dynamics Still Weigh Heavy Five Years On
- Central bank has been unwinding balance sheet since June 2022
- Still questions about lowest reserve level amid new dynamics
The Marriner S. Eccles Federal Reserve building in Washington, DC.
Photographer: Ting Shen/BloombergThis article is for subscribers only.
As the Federal Reserve continues to unwind its balance sheet, it’s still dogged by the same issues that it faced more than five years ago.
While market dynamics have evolved, the main issue facing policymakers and investors is how to measure liquidity in the financial system and avoid turmoil that forced the Fed to intervene in September 2019, as the Fed runs down it holdings.