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Fed Balance Sheet Normalization and the Minimum Level of Ample Reserves

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Abstract

The normalization process of the Fed's balance sheet is ongoing. Current plans for monetary policy implementation interact with this process. In particular, normalization is aimed at ultimately providing a minimum level of "ample" reserves. The timing for when that level of reserves will be reached depends on multiple factors. Based on assumptions reflecting current expectations of the evolution of those factors in the medium term, normalization will be completed by late 2025 or early 2026.

Suggested Citation

  • Huberto M. Ennis & Tre' McMillan, 2023. "Fed Balance Sheet Normalization and the Minimum Level of Ample Reserves," Richmond Fed Economic Brief, Federal Reserve Bank of Richmond, vol. 23(07), February.
    • Handle: RePEc:fip:fedreb:95689
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