Expects gradual rate cuts if economy meets forecasts.

Fed will need to be nimble with monetary policy choices. 

Economy is strong and stable. 

Sees downside risk to job market, ongoing risks to inflation goal. 

Balance sheet cuts and rate cuts working in same direction. 

Balance sheet drawdown part of policy normalization. 

Liquidity still abundant in money markets. 

Not surprised there’s some money market volatility. 

Fed should tolerate some money market volatility. 

Expects money markets close to or just above interest on reserves rate. 

Over time wants ‘negligible’ balances in reverse repo facility. 

Fed could change reverse repo rate if cash doesn’t leave facility. 

Selling Fed owned mortgage bonds not current issue.