Q&A from Beefy Bullard

  • The Fed can manage the shrinking and duration of the balance sheet

  • Would like to see companies repatriate cash from overseas

  • Fed should put away the balance sheet tool in an orderly manner

  • Fed is wary of balance sheet changes due to prior taper tantrums

  • Balance sheet run off could go smoothly if it's communicated properly (Wishful thinking?)

  • The US has stayed away from deflation so far thanks to the Fed (where's that Oreally meme?)

There really shouldn't be any tantrums over the balance sheet and clearing the decks. The Fed have been playing with reverse repos and there will be natural maturing that can be easily managed over time.