Apr
04

Shrinking Sheet

easy button Before quantitative easing, the Fed’s balance sheet was $900 billion, 6% of GDP. Today, it’s $4.47 trillion, 24% of GDP. Assuming the Fed wants the balance sheet to again be 6% of GDP, and assuming nominal GDP grows 3%/year, by reducing its balance sheet by $520 billion/year (or $43.3 billion/month) starting 1/1/18, by 12/31/23 — six years later — the balance sheet will be $1.38 trillion, 6.0% of 2023 GDP. Easy breezy!

Share This Post
Facebook Twitter Email

Speak Your Mind

*