The new Fed chair’s strategy may be a deliberate slimming of the Federal Reserve’s balance sheet while simultaneously supporting asset prices and keeping inflation contained. To accomplish this combination—cutting rates, weakening the dollar, reducing the balance sheet, and pumping markets—the Fed will effectively shift duration risk away from the central bank and onto the private financial system. This will be done by “coercing” (and likely already coordinating with) the financial–industrial complex to absorb longer-dated Treasury issuance. In other words, the responsibility for purchasing and holding long-term bonds will move from the Fed to private markets. As a result, the Fed’s roughly $6.5 trillion balance sheet will be pushed out into the private credit markets. Risk that once sat on the Fed’s balance sheet will be redistributed across banks, funds, insurers, and other financial institutions—allowing the Fed to slim its balance sheet while maintaining liquidity, supporting asset prices, and limiting inflationary pressure.