Federal Reserve's Balance Sheet Hits Lowest Level Since 2020

According to BlockBeats, the Federal Reserve's balance sheet decreased by $17 billion last month, reaching $6.7 trillion, the lowest level since April 2020. Since April 2022, the Federal Reserve has reduced its balance sheet by $2.3 trillion, marking a 25% decrease. This reduction accounts for approximately 48% of the $4.8 trillion purchased during the pandemic response period. Currently, the Federal Reserve holds $4.2 trillion in U.S. Treasury securities and $2.2 trillion in mortgage-backed securities (MBS). In March, the Federal Reserve announced a slowdown in the pace of quantitative tightening (QT), reducing the average monthly pace from $60 billion to $40 billion, indicating a deceleration in the balance sheet reduction process.