Why the Fed’s balance sheet is making markets nervous
Robert Kaplan, the president of the Federal Reserve Bank of Dallas, on Thursday told Bloomberg that the Fed ought to think about slowing down how quickly it’s shrinking its balance sheet. What’s a balance sheet? It’s a ledger of the Fed’s assets and liabilities that, in the middle of the financial crisis, the Fed expanded as it bought bonds and mortgage-backed securities to give the economy a boost. So instead of talking about interest rates again, we’re going to talk about this other tool the Fed uses to control the economy. Marketplace host Kai Ryssdal called up Victoria Guida, who covers the Fed for Politico, to talk about what’s going on.
Click on the audio player above to hear the full interview.
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