November 14, 2021

Federal Reserve’s $8 Trillion Balance Sheet Will Limit Taper Tantrum

Overlooked this week amid all the talk about the Federal Reserve starting the process of eventually paring back on its unprecedented stimulus efforts was the fact that the central bank’s balance sheet assets surpassed $8 trillion for the first time. This milestone should be a reminder that just because the Fed may soon start reducing, or “tapering,” the $120 billion a month it has been pumping into the financial system since the start of the pandemic, it doesn’t mean the forces that have underpinned markets are going away anytime soon — perhaps not for years.

Flooding the System

The Fed’s balance sheet assets have reached a new milestone

Sources: Federal Reserve, Bloomberg

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