Federal Reserve Messenger: Federal Reserve Officials Consider Slowing or Suspending Balance Sheet Shrinking

Odaily Planet Daily News: Nick Timiraos, the voice of the Federal Reserve, said that the minutes of the Fed's January meeting showed that officials discussed at last month's meeting whether to slow down or pause the reduction of its nearly $6.8 trillion asset portfolio, and they will face complex issues brought about by raising the federal debt ceiling in the coming months. The dynamics related to the debt ceiling may lead to significant fluctuations in the Federal Reserve's liabilities. The process of shrinking the balance sheet will ultimately deplete the reserves of the banking system, and Federal Reserve officials are unsure how long this process will last. How the Ministry of Finance will manage the currency market fluctuations caused by its cash balance may complicate the Federal Reserve's ability to determine the correct reserve balance. Therefore, according to the meeting minutes released on Wednesday, officials believed at the January meeting that it may be appropriate to consider suspending or slowing down the reduction of the balance sheet until the debt ceiling issue is resolved. (Golden Ten)