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Since the previous report, the size of the Federal Reserves balance sheet decreased roughly $700 billion, from about $8.7 trillion on March 29, 2023, to about $8.0 trillion as of Sep- tember 27, 2023 (table 1).
The Balance Sheet shows the nature and amount of the federal governments assets (what it owns) and liabilities (what it owes) and the difference between the two, called the net position.
The Federal Reserves balance sheet. The Federal Reserve operates with a sizable balance sheet that includes a large number of distinct assets and liabilities. The Federal Reserves balance sheet contains a great deal of information about the scale and scope of its operations.
The Federal Reserve System is the central banking system of the United States. The Fed uses the system and the tools it has to set interest rates and regulate the money supply to accomplish its mandate of price stability and maximum employment.
Balance sheet reserves are liabilities that appear on the balance sheet. The reserves are funds set aside to pay future obligations. The balance sheet reserves of insurance companies are regulated so that these companies have sufficient reserves to pay client claims.
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It began reducing its balance sheet gradually (known as quantitative tightening, or QT) in June 2022 by not reinvesting all the proceeds of maturing securities. As of early January 2023, the Fed had reduced its assets from a peak of nearly $9 trillion to $7.7 trillion.
The Federal Reserve - FRBservices.org.

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