In an exclusive interview for CNBC Pro subscribers, former Fed Gov. Robert Heller joined Rick Santelli to discuss the ongoing expansion of the Fed's balance sheet and the potential implications.
Last year, the Fed transferred a record $117 billion in earnings to the U.S. Treasury, an increase of 21 percent from the previous record set in 2014, according to estimates by the Federal Reserve System. The Fed's balance sheet stands at $4.5 trillion.
With more leverage and less output in the horizon, given the expected normalization in interest rates, Heller addresses the looming pitfalls.
Here are the highlights from the interview: