world-economy

Fed Officials Warn Against Balance Sheet Reduction, Credit Market Risks

Federal Reserve Governor Michael Barr rejected proposals to shrink the central bank's balance sheet Thursday, calling the objective misguided and a potential threat to financial stability. Barr also cautioned that stress in private credit markets could trigger widespread contagion effects, potentially constraining credit availability across the economy. New York Federal Reserve President John Williams said the current monetary policy stance appropriately balances risks to price stability and employment amid external disruptions. Meanwhile, Fed Governor Christopher Waller announced that regional Federal Reserve banks had agreed to standardize and centralize certain back-office functions, streamlining operations across the 12-bank system.