On October 11, 2019, in response to overnight lending rates surging due to extremely tight liquidity, the Federal Reserve announced it will be purchasing 60 billion dollars of Treasury bills per month at least into the second quarter of next year in order to maintain ample reserve balances.  This was the first time since 2014 the Fed’s balance sheet is intentionally growing.  While the Fed points out that this “Balance Sheet Normalization” is required to address the need for additional reserves in the system and not technically “QE” (quantitative easing), it nonetheless is adding additional liquidity to the system.

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