WSJ: Interest Rates Are a Distraction; Fed's Asset Holdings Hold Real Power The focus on the Federal Reserve’s interest rate decisions is misplaced, as the real influence lies in the Fed’s massive asset holdings, which have significantly expanded since the 2008 financial crisis and the 2020 pandemic. While rate cuts are anticipated, the Fed’s balance sheet, now at $7.3 trillion, plays a crucial role in shaping financial conditions and inflation. The Fed’s asset purchases have increased the money supply, contributing to recent inflation surges. Shrinking the balance sheet would help stabilize prices, but current signals suggest the Fed will maintain its large holdings, impacting the broader economy and financial markets. « Previous Article Next Article » Share This Article Choose Your Platform: Facebook Twitter Google Plus Linkedin Related Posts Five Key Trends Shaping the Global Commodities Landscape This Week READ MORE Record-Breaking Gold Rally Pauses as Market Eyes Fed Signals READ MORE Everything's Overvalued: Marc Faber Sees Precious Metals as Safe Haven READ MORE Crude Market Heats Up: WTI Climbs 3.3% as Supply-Demand Gap Narrows READ MORE What Is the Gold Spot Price and How Is It Set? READ MORE Add a Comment Cancel replyYour email address will not be published. Required fields are marked *Name * Email * Save my name, email, and website in this browser for the next time I comment. Comment