Fed's Powell Says Premature to Consider Normalizing Balance-Sheet

The transcript discusses the Federal Reserve's approach to managing its balance sheet, focusing on past events like the taper tantrum and the Fed's current goals of achieving maximum employment and price stability. It explains the steps taken post-global financial crisis, the dynamics of the Fed's balance sheet, and the increased demand for bank reserves. The Fed's strategy for future policy normalization emphasizes careful communication and gradual implementation to avoid surprises.

What is the significance of public demand for currency and bank reserves in relation to the Fed's balance sheet?

What is one key strategy the Fed uses to normalize policy over time?