The era of shrinking is officially over.
After years of Quantitative Tightening (QT), the Federal Reserve has slammed the brakes and pulled a full U-turn on its balance sheet strategy. The data isnโt whispering anymore โ itโs SCREAMING.
๐ THE NUMBERS THAT MATTER
๐ฅ Weekly Shockwave:
The Fedโs balance sheet EXPLODED by +$24.4 BILLION in the week ending Dec 24 โ the largest weekly surge since the 2023 banking crisis.
๐ Trend Confirmed:
This is now 3 straight weeks of expansion, totaling +$45.5 BILLION in less than a month. This isnโt noise โ itโs a signal.
๐ฆ The New Floor:
Total Fed assets now sit at $6.58 TRILLION, the highest level since October. The bottom is in. The pivot is real.
๐ง WHY IS THIS HAPPENING RIGHT NOW?
The financial systemโs plumbing is running dry.
Overnight funding markets are flashing stress โ ๏ธ, reserves are tightening, and volatility is knocking at the door.
๐ To keep markets functioning smoothly and maintain โample reserves,โ the Fed is doing what it always does when pressure builds:
ADD LIQUIDITY.
This isnโt policy easing in name โ itโs easing in ACTION.
๐ฎ WHAT 2026 IS ABOUT TO BRING
The Fed isnโt testing the waters โ itโs diving in headfirst ๐โโ๏ธ๐ฆ
๐ Monthly Buying Power:
Projected $35โ$55 BILLION in Treasury bill purchases EVERY SINGLE MONTH.
๐ฐ Liquidity Flood:
Total purchases could reach ~$550 BILLION in 2026.
๐ The Big Number:
This pace likely pushes the balance sheet BACK ABOVE $7.0 TRILLION by year-end.
๐ง THE BIG PICTURE
The โGreat Shrinkโ is DONE. โ
QT has officially BOTTOMED OUT.
As we step into 2026, the Federal Reserve is once again a NET BUYER, and the liquidity taps are opening wide ๐๐ฅ
History is clear: ๐ง Liquidity fuels markets
๐ Assets front-run the flow
๐ฅ Volatility + momentum follow
Stay sharp. Stay early. This is how the next cycle begins.
#FedBalanceSheet #QuantitativeTightening
#FOMC #LiquidityWave #MacroAlert ๐จ
