Federal Reserve's Recent Balance Sheet Expansion Shows Progress

Qinbafrank posted on X. Recent analysis of the Federal Reserve's balance sheet expansion over the past few months indicates some progress. The Reserve Management Purchase (RMP) has led to an increase in bank reserves and dollar liquidity, reversing the downward trend seen over the past three years. However, liquidity levels have not yet returned to the normal range observed during this period. Typically, over the past three years, the lowest point for bank reserves was $2.8 trillion, with a peak at $3.6 trillion and a median of $3.2 trillion. From a personal perspective, U.S. bank reserves need to exceed $3 trillion to be considered in a sufficient range, while surpassing $3.2 trillion would indicate a truly ample and surplus liquidity situation. For more detailed analysis, refer to the extended article shared.