Fed’s Balance Sheet: Large Yet Sufficient
The Federal Reserve's Balance Sheet: Recent Trends
As of March 4, the Federal Reserve holds $6.6 trillion in total assets, reflecting a decrease of $2.3 trillion, or 26%, from its peak of $9.0 trillion reached in April 2022. Despite this reduction, the current balance sheet remains significantly higher than the pre-pandemic level of $4.5 trillion.
Had the balance sheet continued to expand at the exponential pace observed before the Global Financial Crisis—prior to the introduction of various liquidity and credit programs and three rounds of quantitative easing—total assets would now stand at roughly $3 trillion. Similarly, if the asset-to-GDP ratio had remained at its early 2008 level, the balance sheet would be much smaller today.
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