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Federal Reserve Bank of Cleveland
Economic Commentary
W(h)ither the Fed’s balance sheet?
John B. Carlson
Joseph G. Haubrich
John Lindner

Federal Reserve policymakers have expressed their support for ultimately shrinking the Fed’s balance sheet and returning the composition of its portfolio to only Treasury securities. Policymakers also favor returning to a fed-funds-rate-targeting procedure or something quite similar. While Fed holdings of some asset classes have been diminishing naturally, the orderly reduction of others could involve special tools that the Fed has been putting in place for a while. An ongoing issue will be to determine an optimal sequence of appropriate actions.

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John B. Carlson & Joseph G. Haubrich & John Lindner, "W(h)ither the Fed’s balance sheet?" , Federal Reserve Bank of Cleveland, Economic Commentary, issue Jul, 2010.
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Keywords: Monetary policy - United States; Federal Reserve System; Financial crises
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