Federal Reserve Balance Sheet Tops $8T for First Time
The U.S. central bank will continue buying Treasury and mortgage bonds to support the economy.
The Federal Reserve's balance sheet has exceeded $8 trillion for the first time, following extensive measures the U.S. central bank took last year to contain the economic damage from the coronavirus.
The Fed’s balance sheet has nearly doubled since March 2020, when the pandemic erupted in the U.S, based on weekly statistics released Thursday by the U.S. central bank.
The central bank announced last week it would start selling the corporate bonds and exchange-traded bonds it bought during the pandemic through an emergency-lending vehicle.
But the Fed’s monetary-policy committee has pledged to keep buying U.S. Treasury bonds and mortgage bonds at a pace of about $120 billion a month “until substantial further progress has been made toward the committee’s maximum employment and price stability goals.”
Cryptocurrency investors have been monitoring if and when the Fed will start tapering its easy money policy.
A popular narrative in the crypto market is to view bitcoin as a hedge against inflation, especially in the face of the trillions of dollars of monetary stimulus pumped into financial markets over the past year.
Prior to the financial crisis of 2008, the Federal Reserve balance sheet stood at less than $1 trillion.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.