Federal Reserve Governor Waller supports balance sheet reduction and adjustment of asset structure.

Federal Reserve Governor Wall said that the asset-liability balance should continue to be reduced, including adjusting the asset structure to increase the proportion of short-term assets, but excessive cuts may not be necessary. "I believe that we are likely to continue allowing securities to naturally roll off the balance sheet through maturities and prepayments in the future, reducing reserve balances," Wall said in a speech prepared for a Dallas Fed event on Thursday. Wall advocated for shrinking the balance sheet throughout the entire speech, but suggested that the extent should be smaller than what some Fed observers and economists have proposed. He suggested that current bank reserves are still at a "comfortable" level, and the ideal size should be maintained at around $2.7 trillion. Including the currency in circulation held by the Fed and the general account balance of the Treasury Department, the total asset-liability balance sheet would reach $5.8 trillion, compared to the current $6.7 trillion.