Now that the decision on the operating framework has been made, a natural next step is to contemplate the appropriate size of the Fed's balance sheet and reserves and the process for getting there.
In line with the requirements of operating with ample reserves--and boosted by the growth in nonreserve liabilities--the Fed will maintain a larger balance sheet and reserve supply relative to the pre-crisis period, with the goal of remaining on the flat portion of the reserve demand curve.