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Fed's balance sheet size to exceed $10 trillion by the end of 2021

The US Federal Reserve's (Fed) balance sheet is likely to exceed $10 trillion by the end of 2021, according to analysts at Morgan Stanley. 

The central bank has expanded its balance sheet by over $3 trillion to $7.10 trillion in the past 3.5-month to help the economy and credit markets absorb the shock arising from the coronavirus outbreak. More importantly, the Fed is unlikely to shift away from the ultra-accommodative stance anytime soon. 

"In this cycle, the Fed's balance sheet will expand more than it did during QE1, Q2, and Q3," said Morgan Stanley.

Balance sheet expansion could bode well for gold and weigh over the US dollar. 


 

Author

Omkar Godbole

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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