Macro Matters: Stanford’s Duffie on Fed Balance-Sheet Limits
Darrell Duffie, the Adams Distinguished Professor of Management and Finance at Stanford Graduate School of Business, joins Bloomberg Intelligence’s Ira Jersey on this Macro Matters edition of the FICC Focus podcast to discuss how much the Federal Reserve can realistically shrink its balance sheet under Chair Kevin Warsh. Duffie argues that the real constraint isn’t on the asset side, but on the liability side of the Fed’s balance sheet, especially reserve balances, paper currency and the Treasury General Account. The two examine how payment-system needs, liquidity regulations and banks’…
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