Fed Must Be 'Very Vigilant' in Monitoring Balance Sheet, Kaplan Says

The video discusses the Federal Reserve's balance sheet process, initiated in 2017, which involves letting maturities lapse without selling securities. The speaker emphasizes the unprecedented nature of exiting quantitative easing and the need for vigilance and openness to adjustments. Concerns about liquidity and market sensitivity are addressed, noting that trading volumes are lower than a decade ago. The speaker is cautious about speculating on adjustments to the balance sheet runoff, which currently involves a $50 billion monthly rate between treasuries and mortgage-backed securities.

What is the process mentioned for managing the balance sheet?

How does Jay Powell describe the current situation regarding quantitative easing?

What concerns do traders have regarding the balance sheet?

What factors does Jay Powell mention that could affect market liquidity?

What is the current runoff rate for treasuries and mortgage-backed securities?