Fast Take
In line with knowledge from FRED, the Federal Reserve’s steadiness sheet has expanded considerably since 2002, rising from $720 billion to $7.2 trillion. This represents a Compound Annual Development Price (CAGR) of 11% over 22 years. Curiously, a current perception from CryptoSlate signifies that the S&P 500 has additionally skilled an identical CAGR of 11%, suggesting that the S&P 500 grows on the identical charge because the Fed’s steadiness sheet growth. In the meantime, the SPX has risen roughly 16% year-to-date. In distinction, Bitcoin (BTC) has proven a exceptional CAGR of roughly 63% and has elevated by roughly 50% year-to-date (YTD).
Inspecting the share will increase throughout the Quantitative Easing (QE) occasions in 2008 and 2020 offers further context. In the course of the 2008 monetary disaster, the Fed’s steadiness sheet elevated by 144%; throughout the COVID-19 pandemic in 2020, it grew by 137%. If an identical disaster have been to happen and the Fed have been to reply with one other aggressive QE, the steadiness sheet might doubtlessly attain round $17 trillion.
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