In testimony to Congress last Thursday, Marvin Goodfriend, an economics professor at Carnegie Mellon University, described the challenges the Federal Reserve faces in its exit strategy.

Goodfriend discussed the options available to the Fed as potential exit strategies, including conventional monetary policy tools. However, he downplayed the use of federal funds rate as an exit strategy as it would require a massive program to drain reserves. According to Goodfriend, a better solution would be to