###POV: AND NOW FOR THE INTERESTING.............>

FED: ###POV: AND NOW FOR THE INTERESTING QUESTIONS: The FOMC cleared up two key

areas of balance sheet policy Wednesday, but the biggest questions linger.

- First, the accompanying statement and Powell's prepared press conf comments

made official that the Fed will stick to the 'floor' policy system.

- Second, the FOMC revised its ongoing guidance (since Jun 2017) that it would

end balance sheet runoff 'if a material deterioration in the economic outlook

were to warrant a sizable reduction' in the Fed funds rate.

- That tied ending runoff to rate cuts. But that was replaced by: 'prepared to

adjust any of the details for completing balance sheet normalization'.

- So the new, basic rules of the game that most had already assumed are now

official - large reserve balances will persist, and the runoff is more flexible

and not necessarily short-term rate dependent.

- Now, the big questions. MNI`s Fed correspondent got a vague answer from Powell

at the presser about the final size of the balance sheet/reserves, which is key.

- Other big ones include timing of end-runoff, and composition and weighted

maturity of assets - which we will explore in upcoming analysis pieces.