Here’s How Fed Balance Sheet Runoff Ends

Last week, I noted that ongoing drain from the Fed's RRP facility telegraphed the end of QT likely by the end of 2024. More than a few observers, analysts and strategists have suggested the Fed should halt balance sheet runoff before RRP is completely drained. The definition of “abundant,” “ample” and “scarce” isn’t fixed. Nobody knows exactly where the reserve scarcity threshold is, and as we saw in September of 2019, it’s easy to step over that threshold accidentally to fairly