Where Data Tells the Story
© Voronoi 2025. All rights reserved.
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 tightening—from Q1 2022 to Q2 2025—the Fed reduced its total assets by $2.27 trillion (–25.5%), 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 (–26.9%) and representing 68% of the total decline. Mortgage-backed securities (MBS) declined by $0.56 trillion (–20.8%). 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.