US Fed Reports $2 Trillion Balance Sheet Reduction, Slowed Securities Runoff in June 2024, Plans to Stop at "Ample Reserves"

The Federal Reserve’s latest **Monetary Policy Report (February 2025)** provides updates on the balance sheet reduction process. Here are the key takeaways, with exact quotes from the report: [https://www.federalreserve.gov/publications/files/20250207\_mprfullreport.pdf](https://www.federalreserve.gov/publications/files/20250207_mprfullreport.pdf) * **Total Balance Sheet Reduction:**"The Federal Reserve has reduced its securities holdings by $297 billion since June 2024, bringing the total reduction in securities holdings since the start of balance sheet reduction to about $2 trillion." * **Slowed Reductions in June 2024:**"To ensure a smooth transition, the FOMC slowed the pace of decline of its securities holdings in June 2024." * **Plan to Stop Reductions When Reserves Are High Enough:**"The FOMC intends to stop reductions in its securities holdings when reserve balances are somewhat above the level that the FOMC judges to be consistent with ample reserves." * **Balance Sheet Expected to Fall Below $6.4 Trillion:** The report does not state this explicitly, but based on the continued reduction, the balance sheet is moving toward this level. The Fed has not set an exact date to end balance sheet reductions, but the report makes it clear that the process is nearing its final stage. IMHO, I'd expect a pause on QT for the June 18th FOMC. *Let's see if the market starts to front run this.* Part of the reason imho why ETH hasn't outperformed BTC this cycle is because of a lack of Quantitative Easing from the US FED. This existed back in 2017 and 2021.