# MacroPolicy

#WalshSaysToCautiouslyShrinkBalanceSheet
As of today, Walsh’s comments about cautiously shrinking the balance sheet highlight a more measured tone emerging from policymakers after years of aggressive intervention. Rather than signaling abrupt tightening, this language suggests an awareness of how sensitive markets remain to liquidity changes and how easily confidence can be disrupted by policy missteps.
Balance sheet reduction is not just a technical adjustment; it directly affects liquidity across financial markets. When central banks shrink their balance sheets too quickly, risk assets ofte