It will take decade to return Fed balance sheet to normal: Goldman economist

Don't expect the Fed's balance sheet to normalize anytime soon, Goldman study says - The Tell - MarketWatch

The forecast assumes the Fed isn’t likely to stop buying securities until well into 2014, resulting in a balance sheet well over $4 trillion.
Another key assumption is the Fed will shift its policy stance and rely mainly on “passive” portfolio runoff from maturities and pre-pays to shrink its balance sheet when the time comes, instead of outright sales.
The last exit strategy, published by the Fed in 2011, projected the central bank would sell mortgage-backed securities on its balance sheet over a period of 3 to 5 years.
Over the last few months, Fed Chief Ben Bernanke and other officials have begun suggesting a more passive approach to shrinking its balance sheet, in order to avoid adverse effects on market functioning.