Fed's Williams (Voter) says there is good understanding about ways to shift demand for reserves; Balance sheeet debate should not be about the nominal size of holdings

Newsquawk Staff · 9 Jul 2026, 13:26 UTC

Balance Sheet

Reforms to liquidity regulations should bear in mind bank safety issues.
Unclear how much smaller Fed balance sheet can get.
Fed's goal with balance sheet is about interest rate control.
Balance sheet policy will react to regulator changes.

Economy/Policy

Inflation is far too high.
Markets still expect oil prices to come down over the next 6-12 months, view is reasonable.
Monetary Policy is focused on how energy prices impact inflation.
AI investment is a driver of inflation.
Tariffs impact on inflation close to its peak.
Fed Minutes captures a "collective reaction function"
Will get inflation back to 2%.
Key to look at underlying inflation actors; not just a specific measure.
Government technical changes could better reconcile PCE inflation and CPI differences.
Policy to remain data dependent. Will have to see how monetary policy reacts to data.
Labur market has been very stable.
Risk is currently more on the inflation side.
0.2% monthly PCE in H2 will be consistent with the goal.
Still uncertainty about longer term neutral rate.
Timeline for Fed task forces is pretty aggressive.
Ample reserves is the state of money markets, not a specific number.

AI

In the longer run, AI investment will be a positive supply shock.
Base case sees broader use of AI that boosts productivity.

Task Forces

Fed task forces a timely chance for officials to think about policies.

Standing Repos

Standing repo operations should be seen as business as usual.
Central clearing of standing repos likely to bring benefits.

What our latest note said

US Market Open, 23 Oct, 10:15 UTC · what it led with

US President Trump says the US crushed Iran, and may want to do it a "little more".
Crude benchmarks firmer on ongoing tensions in the Middle East; recent bout of strength comes after the Houthis launched another missile towards Saudi interests.

Read the whole note Free to read.

Newsquawk Daily

Get the next one free, by email.

What moved overnight, where stocks, bonds, currencies and oil stand, and what’s due today. Written by our analysts.

Both market-open notes, EU and US, every weekday. No account needed. Unsubscribe any time.

If you trade

This headline was on the Newsquawk live feed at 13:06 UTC.

Use the Platform opens our news terminal in your browser, with the live headline feed. It’s news, not a broker.

Use the Platform

Free. No signup, no card.

Case studies

Headlines that moved markets

Headlines from our feed, and what the market did next.

Riksbank maintains its rate at 1.75% as expected; assesses that the probability of a rate increase later this year remains; there is considerable uncertainty and developments call for vigilance
EUR/SEK+0.3%
Norges Bank maintains its rate at 4.25% as expected; may still become necessary to raise the policy rate
EUR/NOK+0.6%
Iran and US talks continue, and reports that the deal is close are wrong.
WTI crude+1.5%

See all 183

More on this story

Make Newsquawk a preferred source on GoogleSelect this to see Newsquawk more often in Top Stories when you search Google.

Balance Sheet

Economy/Policy

AI

Task Forces

Standing Repos

More on this story

Related headlines