Key Federal Reserve officials said Friday that they are aware of the central bank’s continued effort to shrink its massive holdings of U.S. Treasuries and mortgage-backed securities.

Their remarks come days after the Fed released minutes from its January policy-setting meeting, where the central bank acknowledged that market volatility in late December was partly triggered by communications regarding the balance sheet.

After the December meeting, markets turned sour on the interpretation that the Fed would not be flexible on its $50-billion-per-month pace of asset roll-offs. Powell backtracked in early January when he said the Fed “wouldn’t hesitate” to change its program if doing so would preserve its progress toward maximum employment and price stability.

This week, the Fed’s balance sheet fell below the $4 trillion mark for the first time since 2013.

At a conference in New York on Friday, Fed officials noted that the balance sheet unwind process has not been like “watching paint dry,” as Philadelphia Fed President Patrick Harker notably said in 2017.

Fed Vice Chairman Randal Quarles said that “the times have changed” and noted that market participants were fairly sensitive to the central bank’s unwind process.

“I was a little surprised and puzzled by December,” Quarles said.

Quantitative tightening: relatively minor?

St. Louis Fed President James Bullard argued that shrinking the Fed balance sheet should have a relatively small macroeconomic effect, in part because of the fact that the process is being done with interest rates that are not at the zero bound.

Bullard’s thesis: the Fed’s process of buying assets during the Ben Bernanke-era (known as “quantitative easing”) had a huge effect because rates were at the zero-bound and therefore included the added potency of signaling to market participants that the central bank was committed to “lower for longer” monetary policy.

But with the benchmark interest rate now near most policymakers’ estimates of the neutral run rate of the economy, Bullard argues that shrinking the balance sheet does not have “equal and opposite effects” from quantitative easing.

“One may view the effects of unwinding the balance sheet as relatively minor,” Bullard said.

The Fed has not said exactly how small of a balance sheet it would ultimately like to have, but officials have said they would generally like to target a balance sheet that’s larger than it was before the financial crisis.

Looking ahead, many Fed officials have said they could see the Fed ending the balance sheet runoff by the end of this year.