What you're not hearing about the Fed's exploding balance sheet

We are seeing spurious research and hearing unfounded concerns from clients that the growth of the Fed's balance sheet since the Silicon Valley Bank failure has reversed quantitative tightening. The Fed's assets are smaller than when QT began last June, with the Fed's securities portfolio down more than $700 billion and still falling. FDIC credits, discount window loans and the new Bank Term Funding Program partially offset this at more than $300 billion. But rescue assets do not make monetary policy. Cash funding from the Fed, counted as an asset, comes back to the Fed in cash as excess reserves or reverse repo. No assets are bought from the banking sector. Love it or hate it, QT continues -- at the same time as the Fed rescues the banking system.