Fed meeting minutes preview: may hint at the end of balance sheet reduction.

On October 9, the minutes from the Fed's September meeting may show that officials are weighing whether to end the balance sheet reduction plan. The Fed has been reversing some of the pandemic-era stimulus measures by reducing its balance sheet. However, Citigroup economists pointed out that movements in the interest rate market indicate that financing conditions have tightened, which may mean that the size of the balance sheet is nearing the level desired by the Fed. The Citigroup team wrote: "As liquidity decreases, volatility in short-term interest rates has increased. This may prompt officials to at least discuss the possibility of ultimately ending the balance sheet reduction." ( Jin10 )