8 The FOMC’s plans to normalize the balance sheet have been the subject of exhaustive discussion – in FOMC meetings, in speeches by policymakers, and among the many journalists and academics who analyze and discuss Fed policies. Last September, the FOMC published its Normalization Principles, which set forth its plans to reduce the balance sheet to a more normal level over time.
Their return on equity has risen from 4.4% at the end of 2015 to 7.1% at the start of this year, even as their leverage ratios have declined. All banks have benefited from the upward trend in returns on assets since the start of our monetary policy easing in 2014, although in some cases starting from low levels.