The New York Federal Reserve says that banks have sufficient reserves, indicating no obstacles to continue shrinking the balance sheet

The latest data from the New York Federal Reserve shows that the Federal Reserve has encountered no obstacles in continuing to reduce the scale of its balance sheet. The New York Fed reported on Thursday that its reserve demand elasticity index was -0.15 on November 13, remaining stable compared to a month ago. The New York Fed stated in its report that "reserves are still sufficient". This index began to be publicly released a month ago, aiming to show the abundance or tension of bank reserves. A shift towards negative values may indicate an intensification of bank reserve tensions, which directly explains that the Federal Reserve is continuously striving to reduce bond holdings through quantitative tightening (QT). The indicator from the New York Fed suggests there is no immediate need for this process to stop, aligning with recent comments by Fed officials and market expectations; currently, it's expected that quantitative tightening will end at some point next year.