Brian Sack on the Fed’s Balance Sheet and How to Improve the Floor Operating System
Macro Musings with David Beckworth
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The Fed's Tightening Cycle
The Fed started a tightening cycle with nearly $9 trillion of assets on its balance sheet. That's much larger than any of the earlier waves of QE that were implemented after the global financial crisis. What drove that size? Well, I think there are really two issues. One was the considerable strains in markets that we saw in 2020. The other was the need by investors to liquidate their holdings of those securities given the uncertainties in the outlook.
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