Powell Says Fed Confronts Growing Risks
Federal Reserve Chair Jerome Powell stated that the central bank may soon halt reductions in the size of its $6.6 trillion balance sheet, hinting at an end to monetary tightening.
The Fed had previously expanded its assets to nearly $9 trillion in 2020 through quantitative easing to stimulate borrowing during the pandemic-induced economic shock.
In 2022, as the economy showed signs of stability, the Fed began trimming assets by allowing its bond holdings to roll off the balance sheet every month.
Powell said the Fed may soon stop draining bank deposits from the financial system by halting reductions in the size of its $6.6 trillion balance sheet.
Author's summary: Powell hints at ending monetary tightening.