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Fed's Barr Warns Against Shrinking Central Bank Balance Sheet

Federal Reserve Governor Michael Barr rejected proposals to reduce the central bank's balance sheet on May 14, calling the approach misguided and a potential threat to financial stability. Barr spoke at a Money Marketeers of New York University event. His pushback comes amid ongoing debate within policymaking circles about the Fed's asset holdings and their role in the broader economy. Separately, Federal Reserve Bank of New York President John Williams indicated the central bank's current policy stance appropriately balances inflation risks against employment objectives, despite geopolitical uncertainties. Boston Federal Reserve President Susan Collins signaled support for maintaining interest rates at present levels, citing persistent inflation concerns.