Fed Will Have to Start Buying Assets Again, RBC Economist Porcelli Says

The video discusses the shift from Quantitative Easing (QE) to organic balance sheet growth, highlighting the consensus on the continued expansion of the balance sheet. It explains the challenges faced by the Federal Reserve, particularly the shrinking asset side and growing liabilities due to currency growth. The video concludes that the Fed will need to start buying assets again, although the scale will be smaller than previous QE efforts.

What is the new phase that follows Quantitative Easing (QE) according to the transcript?

• Quantitative Tightening

• Organic Balance Sheet Growth

• Fiscal Expansion

• Monetary Contraction

What is the main issue with the Federal Reserve's balance sheet as discussed in the second section?

• The asset side is shrinking while liabilities grow

• There is no issue with the balance sheet

• The liability side is shrinking

• The asset side is growing too fast

Why does the Federal Reserve need to start buying assets again?

• To reduce the currency in circulation

• To counteract the shrinking liabilities

• To balance the relentless growth in currency

• To initiate another round of QE

What is the expected scale of the Federal Reserve's asset purchases according to the final section?

• Unpredictable

• Non-existent

• Relatively small

• Large scale similar to previous QE

Which of the following is NOT a reason for the Federal Reserve's decision to buy assets again?

• To balance the balance sheet

• To address the growing currency

• To shore up assets

• To initiate a new QE