Powell Says FOMC Evaluating Appropriate Timing for End to Balance Sheet Runoff

The transcript discusses the Federal Open Market Committee's (FOMC) decision to continue using the current operating procedure for monetary policy, known as the floor system, which involves using administered rates to control the policy rate with ample reserves. This approach is believed to provide effective control of short-term money market rates. The FOMC is also addressing questions about balance sheet normalization, with the ultimate size driven by financial institutions' demand for reserves. Current estimates suggest a larger balance sheet than previously thought, and the committee is evaluating the timing for ending balance sheet runoff while minimizing risks.

What is the committee evaluating regarding the end of balance sheet runoff?

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What are the goals the committee aims to achieve while minimizing risks?

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