Fed’s QT: Total Assets Drop by $91 Billion From Peak (QE Created Money, QT Destroys Money)

by Wolf Richter
Wolf Street

What the Fed did in details and charts.

The Federal Reserve’s quantitative tightening (QT) finished its second month of the three-month phase-in period. Total assets on the Fed’s weekly balance sheet as of August 3, released this afternoon, fell by $17 billion from the prior week, and by $91 billion from the peak in April, to $8.87 trillion, the lowest since February 2.

[…] QE created money that the Fed pumped into the financial markets via its primary dealers, from where it began circulating and chasing assets, including in non-financial markets such as housing and commercial real estate. The purpose and effect were to repress yields and create asset price inflation. And it finally also helped create raging consumer price inflation.

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