Fed Quantitative Tightening takes Fed assets back to February levels

The US Federal Reserve started Quantitative Tightening in April. This involves maturing bonds rolling off their books without being replaced. As the govt redeems these bonds, the payments disappear into the Fed, reducing the money supply.

The Fed has reduced it's assets by $74 billion since April, which sounds a lot but just takes them back to where they were in Feb 2022.

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Given that inflation started to rise in March 2021, they need to shrink the balance sheet way, way more to get back to where they were back then. It will take at least two years unless they speed it up.