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Fed Liquidity Is Back, the Private Sector Is Deleveraging (Kind Of), and Wages Are Falling Behind
The Fed has reversed course, expanding its balance sheet by roughly $105 billion since early December - the largest increase since the 2023 regional banking crisis. More liquidity is back in play, a change that historically has coincided with easier financial conditions, higher risk-taking, and pockets of excess across asset markets. What you need to know: The Fed’s balance sheet has expanded by roughly $105 billion since early December, its largest jump since the 2023 regional banking crisis, a clear sign that liquidity is easing again. Why it matters: For the first time in nearly three years, the Fed is expanding ... (full story)