Yellen Says Balance-Sheet Unwind Will Be Predictable

The video discusses a balance sheet normalization program starting in October, which aims to gradually reduce reinvestments from maturing treasury and agency securities. The program sets caps on the decline of securities holdings, which will increase over the next year. The goal is to prevent market disruptions and interest rate volatility. The balance sheet is not intended as an active monetary policy tool, but adjustments may occur if economic conditions worsen.

What is the purpose of the sheet normalization program mentioned in the text?

How will the decline in securities holdings be capped from October through December?

What are the maximum caps for Treasurys and agency securities after the initial period?

What is the primary means of adjusting the stance of monetary policy according to the text?

Under what circumstances would the committee consider resuming reinvestments?