Fed meeting notes: or hint that the balance sheet is coming to an end

The Fed's September meeting notes are likely to show officials weighing whether to end the programme of balance sheet reduction, which the central bank has used to reverse some of its epidemic-era stimulus. But Citi economists note that interest-rate market movements suggest that funding conditions have tightened, which could mean the size of the balance sheet is close to what the Fed wants. "As liquidity has declined, volatility in short-end rates has increased," the Citi team wrote. "This may have prompted officials to at least discuss the possibility of an eventual end to balance sheet reduction."