1018 ET - Dallas Fed President Lorie Logan says that the Fed has two main paths toward a smaller balance sheet, a policy goal that Fed Chair nominee Kevin Warsh has championed in the past. First, the Fed could unilaterally allow its asset book to shrink, which would reduce bank reserves--a step that on its own would put upward pressure on wholesale interest rates, Logan says in a speech. On the other hand, the Fed could alter bank regulations and take other steps to reduce the amount of reserves that banks feel they need. The latter approach makes more sense and carries fewer risks, she concludes. Logan's approach to the question mirrors how other Fed officials, including governors Stephen Miran and Christopher Waller, have spoken about this issue in recent weeks. (matt.grossman@wsj.com; @mattgrossman)
(END) Dow Jones Newswires
April 02, 2026 10:18 ET (14:18 GMT)
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