Powell Says Fed Balance Sheet Plan to Be Announced 'Fairly Soon'

The video tutorial discusses the dynamics of the Federal Reserve's balance sheet, focusing on the demand for liabilities like currency and reserves. It explains the impact of quantitative easing, where the Fed bought assets to lower long-term interest rates, increasing the balance sheet size relative to GDP. The process of normalizing the balance sheet is explored, highlighting the challenges due to increased demand for currency and reserves. The video also covers the planning and communication strategies for balance sheet reduction, acknowledging uncertainties in equilibrium demand and the timeline for future announcements.

What challenges are associated with normalizing the balance sheet?

What does the committee plan to communicate regarding the balance sheet?