Bill Dudley, former New York Federal Reserve president, predicts the Federal Reserve’s balance sheet reduction, known as quantitative tightening (QT), will conclude soon. He emphasizes operational hurdles and risks associated with further reductions, stating that benefits are minimal. Dudley argues additional QT wouldn’t significantly decrease short-term interest rates and would have little impact on overall monetary policy stance. The Fed has already shrunk its balance sheet from a peak of $8.97 trillion in April 2022 to $6.56 trillion, following large-scale asset purchases during the COVID-19 pandemic to support the economy. These asset sales now contribute to a more balanced supply and demand for reserves.