Powell Says Fed 'Passively' Shrinking $8.4 Trillion Balance Sheet

The transcript discusses the Federal Reserve's current balance sheet size of $8.4 trillion and its strategy to reduce it over the next few years. The Fed is passively shrinking the balance sheet by allowing treasury and mortgage-backed securities to mature without reinvesting the proceeds. The goal is to reach a level of ample reserves similar to pre-pandemic times. While the Fed does not actively sell securities, it has considered selling mortgage-backed securities, though this is not currently a priority.

What is the Fed's target regarding reserves as mentioned in the text?

What is the Fed's stance on selling securities before they mature?