Fed Governor Michelle Bowman (often linked to "Walsh" commentary contexts) advocates cautious balance sheet normalization in 2026, post-QT halt in Dec 2025—after $2.2T reduction from pandemic peaks, reserves now ample, not abundant. Key Guidance · Slow Growth Ahead: Reserves to expand moderately from April '26, matching GDP pace; avoid market stress from over-shrinkage. · Trilemma Challenge: Balance liquidity, inflation control, and financial stability—$6.5T sheet now ~20% GDP vs. 30% peak. · Policy Shift: No more runoff; reinvest maturing Treasuries, eye rate pauses till late '26. #Finance #Economy
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#WalshSaysToCautiouslyShrinkBalanceSheet 📉🏦
Fed Governor Michelle Bowman (often linked to "Walsh"
commentary contexts) advocates cautious balance sheet normalization in 2026,
post-QT halt in Dec 2025—after $2.2T reduction from pandemic peaks, reserves
now ample, not abundant.
Key Guidance
·
Slow Growth Ahead: Reserves to
expand moderately from April '26, matching GDP pace; avoid market stress from
over-shrinkage.
·
Trilemma Challenge: Balance
liquidity, inflation control, and financial stability—$6.5T sheet now ~20% GDP
vs. 30% peak.
·
Policy Shift: No more runoff;
reinvest maturing Treasuries, eye rate pauses till late '26.
#Finance #Economy