Federal Reserve governor Chris Waller acknowledged on Friday that he supported no change in interest rates at the U.S. central bank’s most recent meeting but preferred to continue the current pace of balance sheet runoff.
The official stated that reducing the Fed’s balance sheet is an important part of normalizing monetary policy implementation. Waller noted that slowing or stopping the runoff will be appropriate as the Fed gets closer to ample reserves but, in his view, that point has not yet been reached, as reserve balances remain over $3 trillion and are still abundant. He added that there is no evidence that the U.S. banking system is getting close to an ample level of reserves.