Dudley Says a $10 Trillion Fed Balance Sheet Is Coming

The transcript discusses the implications of the Federal Reserve's $10 trillion balance sheet, including its impact on banking reserves, inflation, and financial asset prices. It highlights the risks associated with the Fed's actions, such as potential losses if interest rates rise. The discussion also covers the consequences of corporate debt and the need for economic recovery post-pandemic. The Fed's unorthodox measures are examined, along with its preparedness for exogenous shocks. Finally, the importance of fiscal policy in conjunction with monetary policy is emphasized.

What does the phrase 'there's no such thing as a free lunch' imply in the context of the Fed's actions?

How does the pandemic affect household and corporate balance sheets according to the discussion?

What is the role of fiscal policy in relation to the Fed's monetary policy as discussed?