JPM's Chang Says Time's Right to Reduce Fed Balance Sheet

The transcript discusses synchronized economic growth and a supportive financial environment, suggesting it's time to move away from a highly accommodative environment. It compares rate hikes and balance sheet normalization, noting different impacts on inflation and growth. Economists predict rate hikes and balance sheet normalization, with a focus on when and how fast these changes occur. The balance sheet is expected to grow, albeit at a slower rate, with a target of $2 trillion by 2022. The market has already anticipated these changes, similar to previous Fed hikes.

In what ways do economists expect the market to react to the upcoming rate hikes?

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What timeline has been outlined for the Fed's balance sheet normalization process?

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