The Fed’s balance sheet exceeded $ 7 trillion: What’s next?

US, WASHINGTON (ORDO NEWS) — The Federal Reserve’s balance sheet for the first time exceeded $ 7 trillion, nearly doubling in the past six months. In the fall, the figure reached only $ 4 trillion, but then the coronavirus epidemic forced Jerome Powell to turn on the printing press at full capacity.

Over the past week, the Fed’s balance sheet account has grown by another $ 103 billion, while the path from $ 6 trillion to $ 7 trillion was covered in a month and a half, that is, the expansion has slowed recently.

Purchases of treasuries and mortgage bonds fell to $ 6 billion a day, although at the peak of the crisis in March reached $ 120 billion. But experts see certain difficulties in this: in the next six months, the US Treasury plans to borrow $ 3 trillion in the market, and it is not entirely clear who will buy such a volume of bonds.

The Fed may have to scale up the QE program again, but it needs some kind of objective reason.


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