Complacency in Uncharted Waters

When the four living Chairs of the Federal Reserve gathered in New York recently for a roundtable discussion, it was a mostly dry affair. There were several lighter moments, however, including one that was unintentionally illuminating. Moderator Fareed Zakaria, marveling at how the Federal Reserve balance sheet had exploded from approximately $900 billion to over $4 trillion on Ben Bernanke’s watch, asked him how the Fed was planning to unwind its massive portfolio. Bernanke deadpanned, “Wel...