Analysis: The pace of the Fed's balance sheet reduction is slowing down, and it has now shrunk to $6.7 trillion.

BlockBeats News, May 11th, according to The Kobeissi Letter analysis, the Federal Reserve's balance sheet shrank by $170 billion last month to $6.7 trillion, its lowest level since April 2020.

Since April 2022, the Fed has reduced its balance sheet by $2.3 trillion, a 25% decrease. This represents about 48% of the $4.8 trillion the Fed purchased during its post-pandemic response. The Fed currently holds $4.2 trillion in Treasury securities and $2.2 trillion in Mortgage-Backed Securities (MBS).

In March, the Fed announced it would slow the pace of Quantitative Tightening (QT) from $600 billion per month to $400 billion per month on average. This indicates that the Fed's balance sheet reduction is slowing down.