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Brookings paper sets out plan to shrink Fed balance sheet

Original: Brookings paper offers broad plan to shrink Fed balance sheet

A new paper from the Brookings Institution lays out a broad framework for how the Federal Reserve could reduce its balance sheet, which ballooned during years of bond-buying programs. The proposal is drawing attention as markets and policymakers watch how the central bank winds down its holdings without unsettling financial conditions.

Why now: The Fed's balance sheet runoff is a live policy issue for markets, so a detailed blueprint from a prominent think tank is attracting interest.

Brookings InstitutionFederal Reserve

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