In an April survey of two dozen Wall Street firms conducted by the Federal Reserve Bank of New York, the median estimate was
that bank reserves would remain at roughly $688 billion in 2025 — and that the Fed’s balance sheet would sit at $3.1 trillion.
“It’s hard to see the balance sheet getting below a range of $2.5 to $3 trillion,” Jerome H. Powell,
a member of the Fed’s board of governors, said in a recent speech to the Economic Club of New York.
John C. Williams, president of the Federal Reserve Bank of San Francisco, said he still expected
that in five years, the balance sheet would be “much smaller than today.”
But others think the reduction could end up being quite small.
The unveiling could come Wednesday, after a two-day meeting of the Fed’s policy-making committee, when the Fed is expected
to announce it will raise its benchmark interest rate by a quarter point, to a range between 1 percent and 1.25 percent.