Fed's Powell Says Demand For Reserves Can Be Volatile; Balance Sheet Should Be Smaller Than Now, But Need A Buffer So That Don't Bump Up Against Scarce Reserves; Don't Want To Be In Same Position As Last Reduction Cycle
Portfolio Pulse from Happy Mohamed
Federal Reserve Chairman Jerome Powell stated that the demand for reserves can be volatile and the balance sheet should be smaller than its current size. However, he emphasized the need for a buffer to avoid bumping up against scarce reserves and not to repeat the mistakes of the last reduction cycle.
June 21, 2023 | 3:20 pm
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NEUTRAL IMPACT
Fed's Powell's comments on the need for a smaller balance sheet with a buffer may impact the overall market sentiment, potentially affecting the SPY ETF.
Jerome Powell's comments on the balance sheet and reserves may influence market sentiment, but the direct impact on the SPY ETF is uncertain. The statement highlights the Fed's cautious approach, which could be interpreted as both positive and negative by investors.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50