Based on continued market normalization and unchanged Fed policies, reserves are headed towards $4.3tn at end-2020. This could clog banks’ balance sheets and limit their ability to lend. At the same time, the Fed is shifting its focus to the provision of credit to the nonfinancial sector and away from Large Scale Asset Purchases (LSAPs). As a result, Fed balance sheet growth this year could disappoint, which would be negative for gold and duration, positive for the USD, but need not be negative for credit and equities...