According to Caixin, economists Seth Carpenter and Michael Gapen of Morgan Stanley stated in a report that Morgan Stanley expects the Federal Reserve to reduce its balance sheet by approximately $1.5 trillion over the next two years, with the reduction potentially beginning as early as the first quarter of 2027, in a reasonable range of $600 billion to $2.5 trillion.
Morgan Stanley Forecasts Fed to Shrink Balance Sheet by $1.5T in Two Years
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Summary
Morgan Stanley’s analysis of Federal Reserve news suggests the central bank may reduce its balance sheet by approximately $1.5 trillion over the next two years. Economists Seth Carpenter and Michael Gapen outlined this projection in a recent report, noting the process could begin in Q1 2027. The potential reduction could range from $600 billion to $2.5 trillion. Crypto news platforms such as AiCoin are closely monitoring the development, as it may impact market dynamics.
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