How the Fed's Silent Balance Sheet Squeeze Is Reshaping Policy

The Federal Reserve Podcast with Fexingo: Interest Rates, FOMC Meetings, and Monetary Policy · Oct 1, 2026 · 7m · transcript

With the ten-year Treasury yield climbing past five percent and the effective federal funds rate holding at three point six three percent, the Federal Reserve faces a structural constraint that headline inflation numbers miss. This episode explores how the shrinking size of the Fed’s balance sheet through quantitative tightening is quietly draining liquidity from the banking system, creating a silent squeeze on reserves. Lucas and Luna break down why this mechanical reduction in central bank assets matters more than the current CPI print of thirty-three point four, and how the interplay…