The program to normalize the size of the Fed’s balance sheet is working its way to its endgame. As of June 26, the Fed’s holdings of Treasurys, Agency MBS, and Agencys totaled about $3.653 trillion, down by about $595 billion since the start of normalization in September 2017. As the FOMC intends, the size of reinvestments are steadily declining and will level off in October. Chair Jerome Powell has previously said that the size of the balance sheet was expected to be slightly about $3.5 trillion at that time. That seems to be the case.
For a history of Federal Reserve Balance Sheet Developments – LSAP (QE) implementation and normalization, please see the Whetstone Analysis Reference Library.
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