ContextSpeech by Jerome Powell on the Fed's balance sheet at the 67th Annual Meeting of the National Association for Business Economics in Philadelphia.
Why it mattersThe Fed Chair explains the balance sheet and why shrinking it further could strain bank liquidity.
Problems raised
Shrinking the balance sheet too far could stress bank liquidity.
Tariffs push up goods prices.
Employment and inflation goals are in tension.
Solutions proposed
Manage the balance sheet carefully to keep reserves ample.
Separate tariff effects from broad inflation.
Set policy meeting by meeting, as there is no risk-free path.
