The Financial Post reports in its Wednesday edition that fixed-income markets are overestimating the impact of potential changes to the United States Federal Reserve's balance-sheet policy, which are likely to be slow and limited, according to the CIBC. A Bloomberg dispatch to the Post reports that the Fed is not likely to start shrinking its $6.7-trillion (U.S.) balance sheet until next year, said CIBC analysts Michael Cloherty, Anjun Ananth and Ian Pollick. Even then, the Fed would not sell holdings of assets like mortgage-backed securities to avoid spooking the market. It would also roll over about a third of its Treasury holdings, they said. Policy-makers have debated ways to reduce one of the main drivers of the balance sheet's growth: the banking sectors' demand for cash held at the Fed. Dallas Fed President Lorie Logan said last week she favours using changes in liquidity rules to shrink banks' need to hold reserves, following similar calls from governor Stephen Miran and vice chair of supervision Michelle Bowman. A recent essay published by the Dallas Fed about ways the central bank can shrink its balance sheet understates the costs and risks of a rapid balance sheet reduction, said the CIBC analysts.