Analysts at research firm Wrightson predicted that the Federal Reserve may be ready to announce an end to balance sheet shrinkage this week, according to online reports. Recent developments in the overnight lending market suggest that financing conditions have tightened and bank reserves have fallen to levels close to what is considered balanced. Wrightson's team said the Fed's action this week would be a prudent move to avoid putting too much pressure on money markets. "Even if the Fed believes the supply of reserves is still reasonably sufficient, we doubt the FOMC will ignore the repeated warning signs in the federal funds rate in recent weeks," they noted.