During a press conference following last week’s meeting of the Federal Open Market Committee (FOMC), Federal Reserve Chair Jerome Powell pointed out that the Fed has made “consequential decisions” about its balance sheet in recent months, including to maintain its current framework for implementing monetary policy and to slow the pace at which it allows maturing securities to run off. A speech last month by New York Fed senior vice president Lorie Logan provides helpful context around questions about balance sheet normalization and how the Fed could implement monetary policy going forward in light of these decisions by the FOMC.
