Despite the disinflationary aspects of the current economy and the long period of tame inflation pressures expected given the large supply of economic 'slack' (well defined by the high level of unemployment and the low capacity utilization rate), worries include the longer term inflationary impacts of the massive Fed easing.
Not only are Fed policy rates just above 0% (remember, the housing bubble was blamed on the low policy rates in 2003-4) but the Fed has also used a tremendous supply of quantitative easing -- essentially creating money which provides an inflationary lift years later.
Just as the Fed proved able to find ways to help offset financial market pressures with the creation of funds they have begun talking about the exit strategy partly in order to guard against inflationary expectations which can feed inflation.
The solution of excess bank reserves is to either drain them from the system or make them more necessary.
To drain the huge supply of reserves the Fed will use standard forms such as reverse RPs (just the other side of the daily RPs the Fed executes) or more permanent solutions such as sales of Treasury securities. The funds from the sales are held at the Fed and thereby drained from the banking system. Some expect that the Fed may go so far as to seek authority from Congress to sell its own bills rather than the outstanding Treasury bills. And as we've learned the Fed can dream up plenty of other "solutions".
To make the reserves more desired by banks the Fed may boost the interest payment paid on reserves or raise reserve requirements as part of the policy tightening phase -- thereby improving the Fed's control on reserves and responding interest rate movement.
The Fed will be equally able to drain reserves as add them. Inflation will continue to be the primary focus of the Fed and believing that it won't guard against an inflationary rebound from the extremely generous policy stance just isn't true to the Fed's ideals or underlying objectives.
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