Wall Street Says Fed Governor Waller’s Estimate of Ample Reserves Is Too Low

Wall Street strategists are arguing that Federal Reserve Governor Christopher Waller’s forecast of the amount of ample reserves in the financial system needed to prevent disruption should actually be higher.

Waller last week said the Fed can lower bank reserves to around $2.7 trillion, from a current level of about $3.34 trillion, allowing the central bank to keep cutting the size of its balance-sheet, a process known as quantitative tightening.