Is the Fed about to restart balance sheet expansion? New York Fed President Williams stated at the ECB annual meeting that the Fed might soon need to expand its balance sheet by purchasing bonds to meet the liquidity needs of the financial system. He expects the Fed is not far from reaching the point where reserve levels transition from 'ample' to 'ample but not excessive.' Speaking at the 2025 ECB Money Market Conference in Frankfurt today, Williams noted: 'The next step in our balance sheet strategy will be to assess when reserves move from the current level of "slightly above ample" to "ample." When that moment arrives, it will be time to gradually restart the asset purchase process.' The New York Fed is the primary executor of the Fed's monetary easing or tightening policies, and balance sheet expansion or contraction is typically carried out by the New York Fed. The New York Fed President also holds a permanent voting seat on the FOMC. Just a couple of days ago, while reviewing the 2019 liquidity crunch in a tweet, we discussed whether the Fed might end balance sheet reduction early, or even restart expansion shortly after stopping reduction, as it did during the 2019 liquidity crunch. Didn't expect Williams to make such a statement so soon. Of course, Williams also mentioned that if bond purchases resume in the future, it would be a liquidity management operation and not a signal of a monetary policy shift toward 'a new round of quantitative easing.' 'These reserve management bond purchases will be a natural continuation of the Fed's "ample reserves framework."' This means that future balance sheet expansion would primarily aim to bring commercial bank reserve levels back above ample levels to maintain sufficient liquidity, rather than to significantly inflate the Fed's balance sheet. Sponsored by meme trading tool http://(xxyy.io) ｜ Fast trading, versatile features, monitor on-chain wallets with @useXXYYio