The Federal Reserve held about $6.74 trillion in total assets as of June 24, 2026, according to the central bank’s weekly H.4.1 release and the St. Louis Fed’s WALCL series. That figure has barely moved over the past month, a sign that the long effort to shrink the balance sheet has stopped. The Fed ended its program of quantitative tightening on December 1, 2025, after more than three years of letting bonds mature without buying replacements.
The size of the balance sheet matters because it shapes how much cash sits in the banking system, how easily the Treasury market absorbs new debt, and where short-term interest rates settle. At its peak in April 2022, the balance sheet reached roughly $8.97 trillion after two years of pandemic bond buying. The Fed has since unwound a little under half of that expansion and now appears content to hold near current levels rather than shrink further.
For households, the balance sheet sits one step removed from the rates they pay, yet it still counts. It works alongside the federal funds target to set the cost of credit that flows through to the prime rate, mortgages, and deposit yields. The Federal Reserve Balance Sheet Tracker follows the weekly totals, and the U.S. Interest Rates Dashboard shows where policy rates stand today. Here is what the portfolio looks like now, how it got here, and why the Fed decided to stop trimming.
Key Takeaways
- Fed total assets stood near $6.74 trillion on June 24, 2026, down from a peak of about $8.97 trillion in April 2022.
- Quantitative tightening ended December 1, 2025, after the Fed shed roughly $2.2 trillion in bonds since June 2022.
- Treasury securities make up about $4.49 trillion of the portfolio; agency mortgage-backed securities account for about $1.96 trillion.
- Bank reserves sit near $2.95 trillion, a level the Fed calls ample; overnight reverse repo use has fallen below $10 billion.
- The Fed now reinvests maturing principal instead of letting it run off, keeping the balance sheet roughly flat.
What the Balance Sheet Looks Like Now
Two asset classes dominate the Fed’s holdings. Treasury securities held outright totaled about $4.49 trillion on June 24, 2026, and agency mortgage-backed securities came to roughly $1.96 trillion, per the H.4.1 release. The rest of the $6.74 trillion total covers items such as repurchase agreements, loans, and accrued items. The Treasury and mortgage portfolios were both built up during the 2020 and 2021 asset purchases, when the Fed bought bonds to hold down longer-term yields and support the economy through the pandemic.
The most striking feature today is how steady the totals have become. Weekly readings for June 10, June 17, and June 24 all clustered near $6.73 trillion, a flat line that reflects the December decision to stop the runoff. On the liability side of the ledger, the picture has shifted more. The overnight reverse repurchase facility, which absorbed more than $2.4 trillion of excess cash at the end of 2022, has drained to less than $10 billion. As that buffer emptied, the cash flowed back into bank reserves and into Treasury bills, which is exactly the rebalancing the Fed wanted before it eased off the brakes.
How Quantitative Tightening Worked
Quantitative tightening is the reverse of quantitative easing. Instead of buying bonds, the Fed let a set amount of its holdings mature each month and did not reinvest the proceeds, so the portfolio shrank on its own. The program began in June 2022 with monthly redemption caps that ramped to $60 billion in Treasuries and $35 billion in agency mortgage securities. Anything maturing above those caps was rolled over, and anything below let the balance sheet fall.
The Fed slowed the pace twice as reserves came down. In 2024 it trimmed the Treasury cap, and by April 2025 it had cut the monthly Treasury redemption limit to just $5 billion while leaving the mortgage cap at $35 billion. Mortgage paydowns rarely reached that ceiling because higher rates slowed refinancing, so the mortgage book fell slowly. Across the full run from June 2022 to the December 2025 stop, total securities holdings dropped by more than $2.2 trillion, split between roughly $1.6 trillion of Treasuries and about $600 billion of mortgage-backed securities. The Fed reversed a little less than half of the pandemic-era growth before calling a halt.
Why the Fed Stopped and What Ample Reserves Means
The Fed runs what it calls an ample reserves framework. Under this system, banks hold enough reserves that the central bank can steer short-term rates through its administered tools rather than through the day-to-day scarcity of cash. The risk in pushing tightening too far is a repeat of September 2019, when reserves grew scarce and overnight funding rates spiked. To avoid that outcome, the Fed wanted to stop while reserves were still comfortably abundant.
Bank reserves stood near $2.95 trillion on June 24, 2026, down from above $3 trillion earlier in the month but still high by historical standards. Many Fed watchers estimate the balance sheet will settle somewhere between $6 trillion and $6.5 trillion, the level judged consistent with ample reserves as currency in circulation keeps growing. The committee has directed its New York trading desk to reinvest maturing principal, rolling Treasury proceeds back at auction and steering mortgage paydowns into Treasury bills. That keeps the headline total roughly flat while gradually shifting the mix toward shorter Treasury securities and away from mortgages.
What the Balance Sheet Means for Your Rates
The balance sheet does not set your borrowing costs directly. The federal funds target does most of that work, and it has held at 3.50% to 3.75% since the June 17 meeting, which keeps the prime rate at 6.75%. A larger balance sheet adds liquidity that can press longer-term yields lower, while a shrinking one removes support and can let them drift higher. With tightening over, that downward pressure on long yields has eased, and the 10-year Treasury yield has hovered near 4.4%.
Because mortgages track the 10-year Treasury and the Fed’s mortgage holdings rather than the funds rate, the balance sheet matters most for home loans. As the Fed lets its mortgage book run down, the spread between mortgage rates and Treasury yields can stay wider than it was during the buying years, which keeps current mortgage rates elevated. Savers feel the other side. A system flush with reserves gives banks less reason to compete hard for deposits, which can cap high-yield savings and CD rates. Borrowers comparing personal loan offers should watch the funds rate first and treat the balance sheet as a slower background force.
Frequently Asked Questions
What does it mean that the Fed stopped quantitative tightening?
It means the Fed has stopped letting its bond holdings shrink. During tightening, a set amount of Treasury and mortgage securities matured each month without being replaced, so the balance sheet fell on its own. Since December 1, 2025, the Fed has reinvested that maturing principal instead, which holds the total roughly flat near $6.74 trillion. The move signals that policymakers believe bank reserves have reached a comfortable level. It is a technical step about plumbing in the financial system, not a change to the federal funds rate or to the direction of monetary policy.
Does the end of tightening mean lower interest rates for me?
Not directly, and not right away. The end of tightening removes a source of upward pressure on longer-term yields such as the 10-year Treasury, which influences mortgage rates. It does not touch the federal funds target, which sets the prime rate behind credit cards and home equity lines. With the funds rate held at 3.50% to 3.75%, the prime rate stays at 6.75% regardless of the balance sheet decision. Over time a stable balance sheet can keep long yields from rising further, but the effect is gradual and shows up in mortgages and bond yields well before it reaches everyday consumer loans.
How big was the Fed’s balance sheet at its peak?
The balance sheet peaked at roughly $8.97 trillion in April 2022, the result of aggressive bond buying that began in March 2020. Before the pandemic, total assets were near $4.2 trillion, so the holdings more than doubled in two years. By June 24, 2026, the total had fallen to about $6.74 trillion. That leaves the Fed having reversed a little under half of the pandemic-era growth. The remaining portfolio is still far larger than it was before 2008, reflecting a structural shift in how the Fed implements policy through abundant reserves rather than scarce ones.
What is the Fed doing with its mortgage-backed securities?
The Fed is letting its agency mortgage-backed securities shrink while it shifts the proceeds into Treasury securities. As homeowners pay down or refinance their loans, principal flows back to the Fed, and the central bank directs that cash into Treasury bills rather than buying new mortgage bonds. The long-run goal is a portfolio made up primarily of Treasuries, which matches the Fed’s preference for holding government debt rather than housing-market assets. Mortgage holdings stood near $1.96 trillion in late June 2026 and should keep declining slowly, since high rates have reduced refinancing and slowed the pace of paydowns.
Why does the size of the balance sheet matter for the Treasury market?
The Fed is one of the largest single holders of U.S. government debt, so its buying and selling affect how easily the Treasury can finance deficits. When the Fed lets holdings run off, private investors must absorb more new debt, which can push yields up. When it reinvests, it steadies demand at auctions. With tightening over and the Fed rolling maturing Treasuries back at auction, that source of pressure has eased even as the government keeps issuing heavily. You can follow the broader debt picture on our U.S. national debt page.
When will the Fed start cutting rates again?
That depends on inflation and the labor market, not on the balance sheet. The June projections pointed to a higher path for the funds rate than markets had expected, with the median dot implying one more increase before any cuts. The next policy meeting is set for July 28 and 29, 2026, though it will not include a fresh set of projections. The balance sheet decision and the rate decision are separate levers. The Fed can hold or even raise the funds rate while keeping the balance sheet flat, and that is the combination it appears to favor for now.
Watching the Balance Sheet From Here
With tightening behind it, the Fed has moved from actively draining liquidity to quietly managing it. The weekly totals should stay near current levels while the mix tilts toward Treasury bills, and the next signals to watch are reserve balances and money-market rates rather than the headline asset figure. Track the policy backdrop through our Fed prime rate coverage, see how decisions reach borrowers on the how the Fed affects loans page, and follow federal borrowing on the national debt tracker.
References
- Board of Governors of the Federal Reserve System, H.4.1 Factors Affecting Reserve Balances: federalreserve.gov/releases/h41
- Board of Governors of the Federal Reserve System, Policy Normalization: federalreserve.gov/monetarypolicy/policy-normalization.htm
- Federal Reserve Bank of St. Louis (FRED), Total Assets WALCL series: fred.stlouisfed.org/series/WALCL
- Federal Reserve Bank of New York, System Open Market Account Holdings: newyorkfed.org/markets/soma-holdings
- Congressional Research Service, The Federal Reserve’s Balance Sheet (IF12147): congress.gov/crs-product/IF12147
- Congressional Budget Office, How Quantitative Easing Affects the Federal Budget: cbo.gov/publication/58457
