Question
Following the Great Financial Crisis, the Fed's portfolio of Treasury and mortgage-backed securities grew from $900 billion to nearly $9 trillion. In recent years there
Following the Great Financial Crisis, the Fed's portfolio of Treasury and mortgage-backed securities grew from $900 billion to nearly $9 trillion. In recent years there has been much discussion about reducing the size of the Fed's balance sheet.
Research and discuss how reducing the Fed's balance sheet might impact our current battle with inflation? What's your take? Should the balance sheet be smaller?
Please see the links below for some useful background.
What is the Federal Reserve's Balance Sheet? Link: https://www.bankrate.com/banking/federal-reserve/federal-reserve-balance-sheet/
The Fed is Shrinking its Balance Sheet. Link: https://www.richmondfed.org/publications/research/econ_focus/2022/q3_federal_reserve#:~:text=In%20response%20to%20inflation%20running,size%20of%20its%20balance%20sheet.
Use evidence to support your response and incorporate formatted in-text citations and references to credit your sources.
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