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Fed's quarles says appropriate to keep balance sheet big enough to buffer against most shocks to reserve supply
FED'S QUARLES SAYS APPROPRIATE TO KEEP BALANCE SHEET BIG ENOUGH TO BUFFER AGAINST MOST SHOCKS TO RESERVE SUPPLY || SAYS ON THE FEW DAYS WHEN BUFFER IS EXHAUSTED, FED COULD DO OPEN MARKET OPERATIONS TO BOOST RESERVE SUPPLY
— First Squawk (@FirstSquawk) February 22, 2019
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QUARLES SAYS FED HAS DISCUSSED ENDING BALANCE SHEET RUNOFF IN LATTER HALF OF THIS YEAR || SAYS ONE OPTION AT THAT POINT WOULD BE TO HOLD LEVEL OF TOTAL ASSETS FIXED FOR A TIME || SAYS HE FAVORS A RETURN TO ALL-TREASURIES FED BALANCE SHEET
— First Squawk (@FirstSquawk) February 22, 2019
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The Future of the Federal Reserve's Balance Sheet
When I was asked to participate on this panel in the middle of last year, the prevailing metaphor regarding Federal Reserve balance sheet policy was "as boring as watching paint dry." Well, times have changed, and I commend the conference organizers for their foresight. Today I would like to discuss some of the recent decisions that the Federal Open Market Committee (FOMC) has made regarding the balance sheet and lay out a rough framework for some further issues that are on the horizon.1 In January, after much discussion, including in previous meetings, the FOMC announced its intent to continue operating in a ... (full story)