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Powell: The Federal Reserve still has room to shrink its balance sheet

On January 30, Federal Reserve Chairperson Jerome Powell hinted at a press conference that the Federal Reserve still has room to operate in reducing the size of its balance sheet. He said that reserves in the banking system are still "abundant" and the Federal Reserve still has solid control over the federal funds rate. As for when the Fed should stop shrinking its balance sheet, Powell said: "I have nothing to say about a specific date."