Christine Lagarde was asked today about the ECB balance sheet and responded that interest rates were their many policy lever. She added that they will eventually have a debate about the appropriate size of the balance sheet.
There have been varying calls for a faster balance sheet runoff including a report earlier today that some ECB officials are weighing a faster reduction in bond holdings.
The ECB holds some 5-trillion euros in government bonds and winding those down more-quickly could be a replacement for rate hikes.
However another report is now out from Econostream saying that ECB insiders are 'reasonably relaxed' about the current pace of QT and that a passive run-off is sufficient 'for now'.
One of the problems with faster bond sales is that it would add to paper losses that national central banks are showing on bond holdings.
Keep an eye on this debate because it could resurface in September, where a hike is 40% priced in for now.