US Federal Reserve Assets More Than Doubled from $4.1 Trillion in January 2021 to a Peak Level of $9.0 Trillion in April 2022. Fighting Inflationary Pressures, the Federal Reserve Has Reduced Its Assets by 7.0% to $8.3 Trillion as of March 2023

Battling importunate inflationary effects, the US Federal Reserve is shedding assets, reducing the size of its balance sheet by 7.0% from peak levels observed in April of 2022 to current levels. This reduction is consistent with Jerome Powell’s statements during his March 8^th Semiannual Monetary Policy Report to the Congress, in which he stated:

“With inflation well above our longer-run goal of 2 percent and with the labor market remaining extremely tight, the FOMC has continued to tighten the stance of monetary policy, raising interest rates by 4-1/2 percentage points over the past year. We continue to anticipate that ongoing increases in the target range for the federal funds rate will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time. In addition, we are continuing the process of significantly reducing the size of our balance sheet.”

Sources:

US Federal Reserve; St. Louis FRED