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Powell Set to Lay Groundwork for Higher Rates

Bloomberg Businessweek

What's the Current Thinking Around Quantitative Tightening?

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The Fed has been reducing its balance sheet in the background, as they like to say, by up to $90 billion a month. The reserves held at the big banks have been draining. So there's a little bit of concern among some people in the market that if this money kind of stays in the reverse repo program, and reserves continue to drain,. That the Fed might then have to change cores if we see reserves fall too low. But what we've heard from the Fed officials so far is that they're aware of what's going on in the markets. They're watching it, and that they're prepared to make changes if necessary.

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