- U.S. Federal Reserve balance sheet surges past $6.9 trillion.
- U.S Treasury Department Plans to borrow $3 Trillion
- Federal Reserve Chair Jerome Powell says “We Won’t Run Out of Money”
According to Charlie Bilello, Founder and CEO of Compound Capital Advisors, the U.S. Federal Reserve balance sheet has now surged past $6.9 trillion as COVID-19 continues to bring the US economy to a grinding halt.
This equates to a $2.6 trillion increase in the last two months and a $3.1 trillion increase from just nine months ago.
U.S Federal Reserve Balance Sheet
The U.S. Federal Reserve balance sheet has not always been this high. Prior to the Financial Crisis of 2008, the balance sheet remained below $1 trillion. Following a period of Quantitative Easing (QE), a process by which a central bank buys government bonds effectively injecting money into the economy, the balance sheet rose to over $2.2 trillion.
This $1.3 trillion increase was contested by many politicians but pales in comparison to the current $2.8 trillion increase amid COVID-19.
Furthermore, the U.S Treasury recently announced plans to borrow $3 trillion to continue to fund COVID-19 economic relief programs. They also plan to borrow an additional $677 billion to fund programs for the latter half of this year.
This borrowing comes as the Federal Reserve Chair responds to an inquiry about increased fiscal spending amid COVID-19.
And the second thing is we won’t run out of money. You know, it’s not a limited pot.Jerome H. Powell (Chair of Federal Reserve)
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