Fed Discusses Balance Sheet “Normalization”: ON RRPs & MBS Go to Zero, Reserves Drop a Lot, Slower QT Reduces Risk of “Accidents,” SRF Calms Repo Market, Future QE without Increasing the Balance Sheet

On Friday, Christopher Waller, member of the Federal Reserve Board of Governors, and Dallas Fed president Lorie Logan laid out some broad principles how far and how fast QT could or should go in order to “normalize” the balance sheet, how they would try to avoid an “accident” along the way so that QT could go on for longer,