Macro Insights Weekly - Fed and ECB's balance sheet headaches

Despite steady QT, the balance sheets of ECB and Fed remain enormous (ECB: 50% of EU GDP, Fed: 30% of US GDP). More consolidation is in store, with uncertain implication for economies and markets.
QE has had its helpful and distortionary impact, same holds for ongoing QT.
Banks’ deep dependence on reserves could be undermined by QT.
Fiscal financing could be jeopardised.
Asset price volatility could rise.
QT needs to continue, but complications would arise next year as the economy slows.