New York Fed survey: Wall Street big banks still expect the Fed to end its balance sheet reduction in April next year

On October 11th, Jinshi Data News, several major banks on Wall Street predicted that the Federal Reserve will end the process of reducing its balance sheet in April next year, which is consistent with their expectations of the Federal Reserve in July. A survey conducted by the New York Fed on so-called primary market dealers before the Federal Reserve's Interest Rate meeting held last month showed that these banks also expect the Fed's balance sheet to bottom out at $6.4 trillion, far higher than the pre-epidemic $4.2 trillion in early 2020. Primary market dealers are counterparties to the Fed's market intervention operations. The survey showed that 'most dealers said they expected the end of balance sheet reduction to depend on the assessment of reserve levels, overnight reverse repo situations, or the evaluation of money market interest rates relative to the upward pressure on management interest rates. Some dealers said that macro factors pose risks to the prospect of ending their balance sheet reduction.' The Fed's balance sheet currently stands at about $7 trillion.