The Fed's balance sheet reduction has reached its target, and the balance sheet has dropped to $6.56 trillion

Former New York Fed President Bill Dudley said that the Fed's balance sheet reduction has reached its target and will stop soon. Further shrinking the balance sheet is difficult and risky, with meager returns. The Fed's balance sheet fell to $6.56 trillion from $8.97 trillion in April 2022. The Fed, which previously purchased large amounts of U.S. Treasuries and agency mortgage-backed securities to support the economy, has now sold off most of them. This move brings reserve supply and demand more into balance.