At its peak in 2022 the Fed’s balance sheet hit a high of $8.9T. Over the last year they got this down to around $8.3T.
However since the fallout of SVB, in under a week, the Fed’s balance sheet has risen back over $8.6T and is now on pace to make new all time highs by next week.
I would usually share an article, but I can’t really find anyone reporting on this.
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Here’s something that touches on this issue:
Yes, the Fed is apparently trying to quit smoking AND lose weight at the same time. From personal experience, I can attest that it’s nigh on impossible.
Buying up the underwater assets of the banks at face value is essentially a return to quantitative easing. So it is no surprise that their balance sheet increases. But the amount is surprising. Even for the Fed that’s a lot of money.
Others are starting to notice
Patient must swallow the medicine, no spoon full of sugar. I wonder how this will affect USD short/long term
One way to quantify this is with the price of gold, which typically moves inversely to the dollar.