Federal Reserve’s Balance Sheet Tops $3 Billion
For the first time in history, the Federal Reserve has grown its balance sheet passing US$ 3 trillion. To bring this into perspective, the Federal Reserve’s balance sheet on September 10, 2008 was US$ 924 billion.
The bond buying program (quantitative easing) is designed to add tinder to the economic recovery by undertaking open-ended purchases of Treasuries and mortgage-backed securities. The US$ 85 billion monthly purchases will cease once the U.S. labor market substantially improves upon determination of the Federal Reserve. The Federal Reserve is counting on the excessive slack in the U.S. labor market which is pushing out inflation to future years.