Federal Reserve Balance Sheet Tracker

Emily Gerson, Financial Writer  |  Reviewed by Mitch Strohm  |  Updated: March 27, 2026

The Federal Reserve’s balance sheet is one of the most powerful tools in monetary policy, yet it receives far less attention than interest rate decisions. At $6.66 trillion, the Fed’s total assets have declined by roughly $2.3 trillion since the pandemic peak, a process known as quantitative tightening that directly affects borrowing costs, bank reserves, and the flow of credit through the economy. This tracker brings together the key balance sheet components, SOMA holdings data from the New York Fed, and related monetary indicators so you can monitor the Fed’s financial position in one place.

SOMA Component	Holdings	% of Total	Peak (2022)
Treasury Notes & Bonds	$3.586T	57.2%	$4.22T
Mortgage-Backed Securities	$1.989T	31.7%	$2.74T
Treasury Bills	$381.6B	6.1%	$326.0B
TIPS (Inflation-Protected)	$288.7B	4.6%	$388.0B
FRNs & Agencies	$18.8B	0.3%	$24.0B
Total SOMA	$6.271T	100%	$8.47T

What Is the Federal Reserve Balance Sheet?

The Federal Reserve balance sheet is a weekly financial statement that details everything the central bank owns and owes. On the asset side, the largest items are U.S. Treasury securities and agency mortgage-backed securities purchased through open market operations. On the liability side, the main entries include currency in circulation, reserve balances held by commercial banks, and the Treasury General Account. When the Fed buys securities, it creates new reserves and expands its balance sheet. When it allows securities to mature without reinvesting the proceeds, the balance sheet shrinks. The H.4.1 statistical release publishes these figures every Thursday afternoon.

Before the 2008 financial crisis, the Fed’s balance sheet was under $1 trillion. Three rounds of quantitative easing between 2008 and 2014 pushed it above $4.5 trillion. The pandemic response then nearly doubled it again to $8.97 trillion by April 2022. The current $6.66 trillion level represents the most significant balance sheet reduction in Fed history, achieved entirely through passive runoff rather than active asset sales. Understanding this trajectory is essential for anyone tracking how the Fed influences the prime rate and broader lending conditions.

SOMA Holdings Breakdown

The System Open Market Account is where the Fed holds the securities it has purchased. As of March 25, 2026, SOMA total holdings stand at $6.27 trillion. Treasury notes and bonds make up 57.2% of the portfolio at $3.59 trillion, followed by mortgage-backed securities at 31.7%, or $1.99 trillion. The remaining balance includes $381.6 billion in Treasury bills, $288.7 billion in Treasury Inflation-Protected Securities, and smaller allocations to floating-rate notes and agency debt. The New York Fed publishes detailed SOMA data weekly, including maturity schedules and reinvestment plans.

The composition of SOMA matters because it determines how quickly the balance sheet can shrink. Treasury securities have defined maturity dates, so the Fed simply lets them expire. MBS, on the other hand, depend on prepayment speeds driven by mortgage refinancing activity. With mortgage rates above 6%, refinancing volume remains low, which means MBS holdings are running off much more slowly than Treasuries. That is why the Fed’s MBS portfolio has only declined from $2.74 trillion to $1.99 trillion over nearly four years, while Treasury holdings have shrunk more quickly.

Quantitative Tightening Progress

Quantitative tightening began in June 2022 with a monthly runoff cap of $47.5 billion, stepping up to $95 billion per month by September 2022. In June 2024, the Fed reduced the Treasury runoff cap from $60 billion to $25 billion per month while keeping the MBS cap at $35 billion. The practical effect has been a cumulative balance sheet reduction of about $2.31 trillion from the April 2022 peak. That works out to an average pace of roughly $50 billion per month over the full QT period, though the rate has slowed considerably in recent quarters.

Monetary Indicator	Current	1 Year Ago	Change
M1 Money Supply	$19.40T	$18.07T	+7.3%
M2 Money Supply	$22.67T	$21.67T	+4.6%
Total Bank Credit	$19.35T	$17.89T	+8.2%
Discount Window Borrowing	$5.22B	$6.89B	-24.2%
Overnight Reverse Repo	$0.99B	$441.7B	-99.8%

The question facing Fed officials now is when to stop. Chair Powell has indicated the balance sheet should eventually settle at a level consistent with ample reserves. Most Fed watchers estimate that endpoint somewhere between $6 trillion and $6.5 trillion, which means QT may be approaching its final phase. The key signal to watch is reserve balances at commercial banks. If reserves drop too low, overnight funding rates can spike, as they did briefly in September 2019. The Fed has said it will slow or halt QT before reserves become scarce, but the exact threshold remains an estimate rather than a hard number.

Money Supply and Liquidity Indicators

M2 money supply, the broadest commonly tracked measure of the money stock, reached $22.67 trillion in February 2026. This represents a full recovery from the unprecedented contraction that began in late 2022. Between April 2022 and October 2023, M2 fell by about $1 trillion, marking the first sustained decline since the Great Depression. The recovery reflects normalized bank lending, steady government spending, and reduced QT pace. The M1 measure, which includes the most liquid forms of money, stands at $19.40 trillion. The gap between M1 and M2 reflects the roughly $3.27 trillion held in savings deposits, small time deposits, and money market mutual funds.

Total bank credit across all commercial banks reached $19.35 trillion, a sign that the banking system continues to lend despite restrictive monetary policy. Discount window borrowing sits at $5.22 billion, a routine level that suggests no particular stress. During the March 2023 banking turbulence that followed the failures of Silicon Valley Bank and Signature Bank, discount window usage spiked to over $150 billion. The current calm in these facilities tells you the banking system has absorbed the higher interest rate environment without systemic strain.

Why the Balance Sheet Matters for Borrowers

The Fed’s balance sheet affects borrowing costs through several channels that most consumers never think about. When the Fed bought trillions in Treasuries and MBS during quantitative easing, it pushed down long-term interest rates by removing duration from the market. As those securities roll off during QT, the supply of bonds held by private investors increases, which puts upward pressure on yields. That pressure flows through to mortgage rates, auto loan rates, and credit card APRs.

For savers, the balance sheet dynamics create opportunities. As the Fed drains reserves and excess liquidity leaves the system, banks compete more aggressively for deposits. That is one reason high-yield savings account rates remain elevated even as the Fed has begun cutting its benchmark rate. The Treasury yield curve also reflects balance sheet policy. With the Fed reducing its Treasury holdings, private investors must absorb more supply, which tends to keep longer-term yields higher than they would otherwise be.

The bottom line for borrowers: even if the Fed cuts the federal funds rate further in 2026, long-term borrowing costs may not fall as much as they did in previous easing cycles. The balance sheet provides a separate, powerful tightening force that works alongside interest rate policy. Monitoring the pace of QT and the level of bank reserves gives you a much more complete picture of where borrowing conditions are headed than watching the federal funds rate alone.

Frequently Asked Questions About the Fed Balance Sheet

What is quantitative tightening and how does it work?

Quantitative tightening is the process by which the Federal Reserve shrinks its balance sheet by allowing securities to mature without reinvesting the proceeds. When a Treasury bond the Fed holds reaches its maturity date, the Treasury pays the Fed, and the Fed simply retires those reserves rather than using the money to buy a new bond. This reduces the total amount of reserves in the banking system and puts upward pressure on interest rates. The Fed is not actively selling securities on the open market; instead, it is passively letting its portfolio roll off according to predetermined monthly caps.

How large was the Fed balance sheet at its peak?

The Fed’s balance sheet peaked at approximately $8.97 trillion in April 2022, following the massive asset purchases conducted during the COVID-19 pandemic. Between March 2020 and early 2022, the Fed purchased about $4.6 trillion in Treasury securities and mortgage-backed securities to stabilize financial markets and support the economy. Before the 2008 financial crisis, the balance sheet was under $900 billion.

What is the overnight reverse repurchase facility?

The overnight reverse repurchase (ON RRP) facility is a tool the Fed uses to set a floor on short-term interest rates. Eligible counterparties, primarily money market mutual funds, can lend cash to the Fed overnight and receive Treasury securities as collateral, earning the RRP rate. At its peak in late 2022, the facility absorbed over $2.3 trillion in excess cash. The near-complete drainage to under $1 billion today means money market funds have found better uses for their cash in the private markets, which is a sign of normalizing liquidity conditions.

Why does the Treasury General Account balance matter?

The Treasury General Account is essentially the federal government’s checking account at the Fed. When the Treasury collects taxes or issues new debt, the TGA balance rises, temporarily draining reserves from the banking system. When the Treasury spends money, the TGA balance falls and reserves flow back into banks. Large swings in the TGA, such as those around tax deadlines or debt ceiling resolutions, can have short-term effects on money market rates and bank liquidity. The current balance of $874.1 billion is within the Treasury’s target range of $700 billion to $900 billion.

When will the Fed stop quantitative tightening?

The Fed has not announced a specific end date for QT, but officials have signaled it will stop when reserve balances are at or slightly above the level consistent with ample reserves. Most analysts estimate QT could end sometime in late 2026 or early 2027, with the balance sheet settling around $6 trillion to $6.5 trillion. The Fed has emphasized it will err on the side of stopping too early rather than too late, having learned from the September 2019 episode when reserves fell low enough to cause overnight lending rate spikes.

How does the balance sheet affect mortgage and loan rates?

The Fed’s balance sheet influences long-term interest rates through the portfolio balance channel. When the Fed holds fewer Treasury securities and MBS, private investors must absorb more of the supply, which pushes yields higher. Higher Treasury yields raise the benchmark that lenders use to price mortgages, auto loans, and other long-term debt. This means QT keeps long-term borrowing costs elevated even when the Fed cuts the short-term federal funds rate. In practice, this is why 30-year mortgage rates have remained above 6% despite the Fed lowering its benchmark rate.

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