Group 1 - The U.S. banking system's reserves have fallen below $3 trillion, with a decrease of approximately $45.7 billion in the week ending October 15, bringing the total to $2.99 trillion [1] - Federal Reserve Chairman Jerome Powell indicated that quantitative tightening (QT) may stop in the coming months as reserves approach a level deemed "adequate" by policymakers [2] - The Federal Reserve's balance sheet reduction is impacting daily operations in the financial system, with liquidity tightening potentially leading to market volatility [1][2] Group 2 - Federal Reserve Governor Christopher Waller stated that the current balance sheet size has returned to a reasonable level corresponding to "adequate reserves," estimated at around $2.7 trillion [2] - The effective federal funds rate has seen a slight increase, indicating a potential tightening of financial conditions, currently within the 4% to 4.25% target range [2] - The trading volume in the federal funds market has decreased, with non-U.S. institutions having less excess cash to allocate, and Federal Home Loan Banks shifting more funds to the repurchase market due to higher rates [3]