Fed Faces ‘Trilemma’ of How Big Its Balance Sheet Should Be

The Fed's dilemma highlights the delicate balance it must maintain between fostering economic growth and controlling inflation. As it navigates this 'trilemma,' the central bank must consider the broader implications of its balance sheet size on market liquidity and interest rates. The decision will likely have far-reaching consequences, making it imperative for the Fed to communicate its strategy clearly to avoid market volatility.