Federal Reserve balance sheet losses $39 billion in August, highest in 5 years
The post Federal Reserve balance sheet losses $39 billion in August, highest in 5 years appeared on BitcoinEthereumNews.com. The Federal Reserve slashed its balance sheet by $39 billion in August, bringing the total down to $6.60 trillion. That’s the lowest number since April 2020, back when COVID-19 lockdowns forced the Fed to go full bazooka. Since hitting a peak in April 2022, the world’s most powerful central bank has cut a total of $2.36 trillion, shrinking its assets by 26.4%. But let’s not pretend they’ve hit reset, because that rollback only unwinds 49.2% of the $4.81 trillion it added during the pandemic. As a slice of the U.S. economy, the Fed’s balance sheet now stands at 21.8% of GDP. That’s the smallest footprint since Q1 2020, putting it right back where it stood in 2013. Still, don’t get it twisted. The Fed is holding on to $2.45 trillion more than it had before the pandemic. That’s 59% higher than pre-COVID levels. So anyone saying the stimulus is gone is either lying or doesn’t know how to read a spreadsheet. Traders bet on rate cuts as Fed fights inflation Bond traders are now piling into bets that the Federal Reserve will go on a rate-cutting spree starting this month. They’re pricing in a 0.25% cut at the September 16–17 meeting, and maybe two more by the end of the year. Weak job numbers and calm producer prices have pushed them into this corner. But the real trigger is inflation. The consumer price index report coming Thursday is expected to show core inflation still sitting well above the Fed’s so-called target. That has Wall Street on edge. Over the past month, yields on 2-year U.S. Treasuries fell to the lowest since April, showing how bullish traders have gotten. Maybe too bullish. If that CPI report runs hot, all those bets could flip upside down real fast. For now, the markets…
The post Federal Reserve balance sheet losses $39 billion in August, highest in 5 years appeared on BitcoinEthereumNews.com.
The Federal Reserve slashed its balance sheet by $39 billion in August, bringing the total down to $6.60 trillion. That’s the lowest number since April 2020, back when COVID-19 lockdowns forced the Fed to go full bazooka. Since hitting a peak in April 2022, the world’s most powerful central bank has cut a total of $2.36 trillion, shrinking its assets by 26.4%. But let’s not pretend they’ve hit reset, because that rollback only unwinds 49.2% of the $4.81 trillion it added during the pandemic. As a slice of the U.S. economy, the Fed’s balance sheet now stands at 21.8% of GDP. That’s the smallest footprint since Q1 2020, putting it right back where it stood in 2013. Still, don’t get it twisted. The Fed is holding on to $2.45 trillion more than it had before the pandemic. That’s 59% higher than pre-COVID levels. So anyone saying the stimulus is gone is either lying or doesn’t know how to read a spreadsheet. Traders bet on rate cuts as Fed fights inflation Bond traders are now piling into bets that the Federal Reserve will go on a rate-cutting spree starting this month. They’re pricing in a 0.25% cut at the September 16–17 meeting, and maybe two more by the end of the year. Weak job numbers and calm producer prices have pushed them into this corner. But the real trigger is inflation. The consumer price index report coming Thursday is expected to show core inflation still sitting well above the Fed’s so-called target. That has Wall Street on edge. Over the past month, yields on 2-year U.S. Treasuries fell to the lowest since April, showing how bullish traders have gotten. Maybe too bullish. If that CPI report runs hot, all those bets could flip upside down real fast. For now, the markets…
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