• Decline can be accounted for by demographic trends
  • There’s a very cognicent risk that Fed might be fueling asset bubbles in certain sectors
  • There may be asset bubbles but not of the magnitude of the US housing or tech bubbles
  • Low rates not just QE would account for any bubb
  • Fed would like to get out of uncharted policy territory if it could
  • Balance sheet is smaller than some other central banks when measured as a percentage of GDP
  • Fed has some breathing room on size of balance sheet for now
  • Sees economic growth accelerating next year