Morgan Stanley predicts that the Federal Reserve will reduce its balance sheet by $1.5 trillion within two years

According to a report by Caixin, Morgan Stanley economists Seth Carpenter and Michael Gapen stated in their report that Morgan Stanley expects the Federal Reserve to reduce its balance sheet size by approximately $1.5 trillion within about two years, with the reduction possibly starting as early as the first quarter of 2027, with a reasonable range of $600 billion to $2.5 trillion.