WASHINGTON, Feb 8 (Reuters) – U.S. Treasury Secretary Scott Bessent said on Sunday he would not expect the Federal Reserve to move quickly to shrink its balance sheet, even under Fed chief nominee Kevin Warsh, who has criticized the U.S. central bank’s bond purchases.
Bessent said on Fox News Channel’s “Sunday Morning Futures” program that the Fed could take up to a year to make decisions on its balance sheet, adding that Warsh will be a very independent Fed chief.
“That will be up to the Fed in terms of what they want to do with the balance sheet,” Bessent said. “I wouldn’t expect them to do anything quickly if they move to an ample (reserves) regime policy, and that does require a larger balance sheet. So, I would think that they’ll probably sit back, take at least a year to decide what they want to do.”
(Reporting by David Lawder; Editing by Paul Simao)