Credit Suisse: The Fed can reduce its balance sheet by selling directly.

On January 25, Credit Suisse analysts said in a statement that the Fed could reduce its balance sheet by selling directly to curb inflation. To keep long-term interest rates low, the Fed has been emergency buying about double its balance sheet. Swiss credit analyst Zoltan Pozsar said in a letter last week that "tightening" in the past had slowed, but this time the Fed could lead to one more crisis. This time, Pozsar said, "the current sales potential is not without potential." He added that income could be deducted from bank account balances and repaid from short-term loans. Demand for repossession of Fed sites has increased over the past year as financial institutions have struggled to find a place to invest their money. (Hot corner)