Wall Street on Parade had an excellent article showing the seismic explosion in the Fed’s Balance Sheet after the housing bubble burst and ensuing financial crisis.
Here is my version of their chart since 2000 where you can seen the seismic shift in the balance sheet (toxic green slime line), particularly with The Fed’s response to Covid. The Fed is signaling a tightening in monetary policy to help reduce inflation (blue line).
But notice that M2 Money Velocity (GDP/M2) is now near the all-time low along with consumer purchasing power.
How BIG is The Fed’s balance sheet? Try more that a third of size of US GDP.
And as The Fed signals its inflation-fighting intentions, mortgage rates have shot up to 5.51%, the highest mortgage rate since June 2009.
Here is a video of the seismic shift in The Fed Balance Sheet, now that they are allegedly tightening monetary policy.
Speaking of seismic shifts, the Atlanta Fed’s Q2 GDP tracker just fell to +0.9%.
The Fed’s noose is tightening on the economy.
3 thoughts on “Fed Data Shows a Half Century of Moderate Growth in the Fed’s Balance Sheet Through Two World Wars – Then a Seismic Explosion Under Bernanke, Yellen and Powell (Mortgage Rates Rise To Highest Since June 2009)”
Highest mortgage rates since 2009 you say. Who was the president then, and in the year prior, 2008?
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