Following the global financial crisis in 2008, assets on the Federal Reserve's balance sheet increased dramatically, from

Question:

Following the global financial crisis in 2008, assets on the Federal Reserve's increased dramatically, from approximately $800 billion at the end of 2007 to $3 trillion by 2011. Many of the assets held are longer-term securities acquired through various loan programs instituted as a result of the crisis. In this situation, how could reverse repos (matched sale-purchase transactions) help the Fed reduce its assets held in an orderly fashion, while reducing potential inflationary problems in the future?
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...