Opinion: The Federal Reserve is highly likely to resume expanding its balance sheet before the end of the year.

BlockBeats reports that on November 6, Joseph Wang—who previously worked as a trader in the Federal Reserve’s Open Market Committee in New York and is now active on YouTube under the name The Fed Guy—stated that after three years of balance sheet reduction, the Federal Reserve is highly likely to restart asset balance sheet expansion before the end of the year. He disagrees with some investors’ views that this move is to prevent a crash in risk asset prices, maintain low Treasury yields, or avoid a liquidity crisis. Wang believes that if the Fed does not inject more liquidity into the system through securities purchases, it will lose control over short-term interest rates, meaning it will no longer be able to set monetary policy. According to Joseph Wang, strong repo demand and the expanding TGA (Treasury General Account) will force the Fed to expand its balance sheet by $300 billion to $500 billion annually. (Jin10)