Fed Balance Sheet Hits Record High at $6.7 Trillion

The Federal Reserve's balance sheet has become an important indicator of its intervention in the economy. The Fed's dual mandate requires it to maintain stable prices and maximum employment, but the 2007-2008 financial crisis showed that even lowering interest rates to zero was not enough to stabilize economies in freefall.

In response, the Fed turned to large-scale asset purchases, also known as quantitative easing. This process involves buying securities, such as mortgage-backed securities (MBS) and Treasuries, injecting capital and liquidity into the market.

The development of quantitative easing has led to a focus on the Fed's total assets, which are represented on its balance sheet. As of September 2, the Fed's assets stand at $6.7 trillion, up $6 billion from the prior week and over $135 billion higher than a year ago.