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Options for reducing the size of the Fed’s balance sheet
Logan, Lorie; Schulhofer-Wohl, Sam (2026-04-02)
Some observers have argued that the Federal Reserve’s balance sheet is too large and complicates the central bank’s operations. We catalog options for reducing the Fed’s major liabilities, which help determine the size of the balance sheet, as well as a framework for assessing the costs and benefits of those options.
Dallas Fed Economics

Discussion Paper
What If the U.S. Dollar's Global Role Changed?
Clark, Hunter L.; Goldberg, Linda S.; Choi, Mark (2011-10-03)
It isn’t surprising that the dollar is always in the news, given the prominence of the United States in the global economy and how often the dollar is used in transactions around the world (as discussed in a 2010 Current Issues article). But the dollar may not retain this dominance forever. In this post, we consider and catalog the implications for the United States of a potential lessening of the dollar’s primacy in international transactions. The circumstances surrounding such a possibility are important for the effects. As long as U.S. fundamentals remain strong, key consequences could ...
Liberty Street Economics , Paper 20111003

Discussion Paper
The Rapidly Changing Nature of Japan’s Public Debt
Wheeler, Harry; Klitgaard, Thomas (2016-06-22)
Japan’s general government debt-to-GDP ratio is the highest of advanced economies, due in part to increased spending on social services for an aging population and a level of nominal GDP that has not increased for two decades. The interest rate payments from taxpayers on this debt are moderated by income earned on government assets and by low interest rates. One might think that the Bank of Japan’s purchases of government bonds would further ease the burden on taxpayers, with interest payments to the Bank of Japan on its bond holdings rebated back to the government. Merging the balance ...
Liberty Street Economics , Paper 20160622

Speech
Theory and Practice of Monetary Policy Implementation
Williams, John C. (2025-11-07)
Remarks at the ECB Conference on Money Markets 2025, European Central Bank, Frankfurt, Germany.
Speech

Speech
Balance Sheet Normalization: Monitoring Reserve Conditions and Understanding Repo Market Pressures
Perli, Roberto (2024-09-26)
Remarks at 2024 U.S. Treasury Market Conference, Federal Reserve Bank of New York, New York City.
Speech

Working Paper
Quantifying "Quantitative Tightening" (QT): How Many Rate Hikes Is QT Equivalent To?
Wei, Bin (2022-07-15)
How many interest rate hikes is quantitative tightening (QT) equivalent to? In this paper, I examine this question based on the preferred-habitat model in Vayanos and Vila (2021). I define the equivalence between rate hikes and QT such that they both have the same impact on the 10-year yield. Based on the model calibrated to fit the nominal Treasury data between 1999 and 2022, I show that a passive roll-off of $2.2 trillion over three years is equivalent to an increase of 29 basis points in the current federal funds rate at normal times. However, during a crisis period with risk aversion ...
FRB Atlanta Working Paper , Paper 2022-8

Discussion Paper
The Recent Rise in Discount Window Borrowing
Sarkar, Asani; Lee, Helene (2023-01-17)
The Federal Reserve’s primary credit program—offered through its “discount window” (DW)—provides temporary short-term funding to fundamentally sound banks. Historically, loan activity has been low during normal times due to a variety of factors, including the DW’s status as a back-up source of liquidity with a relatively punitive interest rate, the stigma attached to DW borrowing from the central bank, and, since 2008, elevated levels of reserves in the banking system. However, beginning in 2022, DW borrowing under the primary credit program increased notably in comparison to past ...
Liberty Street Economics , Paper 20230117

Working Paper
Beyond Reserves: The Federal Reserve's Balance Sheet and the Repo Market
Anbil, Sriya; Anderson, Alyssa G.; Cohen, Ethan; Ruprecht, Romina (2026-06-22)
We present a new constraint on the size of the Fed’s balance sheet: repo market capacity. Calibrating a structural model to the recent monetary tightening cycle, we show that repo market capacity—driven by money market fund liquidity supply—is the binding constraint on the Fed’s balance sheet, not bank reserve demand, which was highlighted in the events of September 2019. We also demonstrate a novel complementarity between interest rate and balance sheet policies: higher policy rates expand repo capacity, allowing the central bank to operate with a smaller balance sheet.
Finance and Economics Discussion Series , Paper 2026-041

Speech
Ample liquidity for a safe and efficient banking system
Logan, Lorie (2025-10-31)
Dallas Fed President Logan delivered these remarks at 'The Evolving Landscape of Bank Funding' conference at the Federal Reserve Bank of Dallas.
Speeches and Essays

Report
The payment system benefits of high reserve balances
Kroeger, Alexander; McAndrews, James J. (2016-06-01)
The policy measures taken since the financial crisis have greatly expanded the size of the Federal Reserve?s balance sheet and have thus raised the level of aggregate bank reserves as well. Over the same period there has been a significant shift in the timing of payments made over the Federal Reserve?s Fedwire Funds Service toward earlier settlement. This paper documents this timing change and presents regression results suggesting that the increase in overall reserve balances explains the vast majority of this development. The paper also discusses the benefits of high aggregate reserve ...
Staff Reports , Paper 779

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