Quantitative Tightening drew down two big liabilities on the Federal Reserve’s balance sheet: Reserves and RRPs dropped by a combined $865 billion from the peak. At the same time, the other two big liabilities on the Fed’s balance sheet went into the opposite direction: the government’s checking account (TGA) and currency in circulation rose. And so total liabilities dropped by $669 billion from the peak, to $8.25 trillion, according to the Fed’s weekly balance sheet released Thursday afternoon. We often discuss the Fed’s assets, such as Treasury securities, MBS, and banking panic loans. Today we’ll take a look at ... (full story)