Fed Unwinding

What if the Fed takes a slow approach to unwinding the balance sheet, and targets a larger final balance sheet?

Janet Yellen has previously indicated the unwinding process could take a decade and may stick with that slow approach

Ben Bernanke has advocated that the Fed maintain a long-term balance sheet far larger than the pre-crisis $900B

This conservative approach may not roil markets, but could still lead to a “taper tantrum” with a quick rebound.