Dick Grasso: $4T question nobody is asking the Fed

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Dick Grasso, former head of the New York Stock Exchange, tells CNBC he's concerned about how the central bank plans to reduce its $4.4 trillion balance sheet.

The question nobody seems to be asking the Fed , according to Grasso: "How are you going to do that in the context of everyone else in the world stimulating [and] lowering rates-applying, if you will, the type of stimulus we applied."

The total assets of the Fed have increased from about $869 billion in August 2007, during three rounds of quantitative easing bond purchases that started in November 2008 in an effort to support the economy and combat the effects of the financial crisis.

Former Fed Chairman Ben Bernanke argued at an event last month the central bank could maintain its balance sheet at somewhat higher amounts than precrisis levels.

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Some Fed watchers see perhaps $1.2 trillion to $1.3 trillion as a new sweet spot, once the unwinding is complete.

"Four trillion is unprecedented, but to shrink it by two-thirds you don't have a comparable period in our history," Grasso said in an interview on CNBC's " Squawk Box ."

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