When the Fed reduces balance sheet in bonds, I suspect they will be investing in other assets, in particular real assets as in property and physical assets.
Additionally, I don't think the Fed will reduce the balance sheet on bonds and just eliminate that 'currency', as in a complete QE reversal. It took me a while to wrap my head around 'creating money out of nothing', now it is difficult to think of that in reversal 'destroying money in to nothing'.
Great video.
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@goldkey Thanks.