Waller said a "hypothetical" Fed balance sheet might stand at $5.8 trillion, with $2.7 trillion in reserves and $780 billion in the Treasury Department's account with the central bank.

US bank stocks hit an all-time low relative to the S&P 500, according to Bank of America. The recent underperformance of bank stocks comes amid a bond crash that has weakened balance sheets.

At a two-day meeting this week, Fed policymakers decided to reduce the monthly cap on the runoff of Treasuries from the Fed's balance sheet to $5 billion, from $25 billion, starting in April.

Chevron is using its balance sheet strength to pay a safe quarterly dividend of $1.51 per share (or $6.04 per share annualized) and run an outsized stock repurchase program of up to $75 billion.

The drawdown of the Fed’s balance sheet has taken central bank holdings from a peak of $9 trillion in 2022 to the current level of $6.8 trillion.