π Federal Reserve Assets (2002β2025): 39 Months of Quantitative Tightening (Q1 2022 β Q2 2025)

In response to the COVID-19 pandemic, the Federal Reserve expanded its balance sheet by 115%, from $4.16 trillion in February 2020 to a peak of $8.94 trillion in March 2022. Over the following 39 months of quantitative tighteningβfrom Q1 2022 to Q2 2025βthe Fed reduced its total assets by $2.27 trillion (β25.5%), bringing the balance sheet down to $6.66 trillion by June 2025.
Treasury securities accounted for the bulk of the reduction, falling by $1.55 trillion (β26.9%) and representing 68% of the total decline. Mortgage-backed securities (MBS) declined by $0.56 trillion (β20.8%). Notably, in Q2 2025, the pace of balance sheet reduction slowed: year-over-year contraction decelerated from 9.9% in March to 7.9% in June, as Treasury holdings remained steady at $4.2 trillion.