Fed Balance Sheet Explained: $6.74 Trillion, Line by Line

On Wednesday 30 September 2026, the Federal Reserve held $6.74 trillion of assets, according to its weekly balance sheet. Of that, $4.56 trillion was US government debt.

A balance sheet has two sides. One lists what the Fed owns. The other lists what it owes, mostly banknotes and the money banks keep at the Fed. Here is each side line by line, how both have changed since 2008 and how to read the weekly figures.

A balance sheet lists what an organisation owns, its assets, against what it owes, its liabilities. The gap between the two is capital, its own money. Capital is listed on the same side as liabilities, so both sides add up to the same total.

When the Fed buys a bond, it pays by crediting the seller's bank with new reserves. Reserves are money that banks hold in their own accounts at the Fed. The bond is a new asset. The reserves are a new liability, so both sides grow by the same amount.

Buying and selling bonds is one of the Fed's main tools, as we explain in What Does the Fed Do? The Fed publishes its balance sheet every week, in a release called H.4.1. The figures here are from the release of 1 October 2026.

The chart shows both sides on 30 September 2026. Each adds up to $6.74 trillion.

On the asset side, US Treasury securities came to $4.56 trillion. They include $560.2 billion of Treasury bills, government debt that matures within a year.

Mortgage-backed securities (MBS) came to $1.90 trillion. These are bonds built from home loans, guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae.

Other assets were $0.28 trillion. Most of that, $182.7 billion, is the extra the Fed paid above the face value of its bonds. Loans to banks, $8.8 billion, are also in this group.

On the other side, bank reserves were the largest item, at $2.88 trillion. Currency, the Federal Reserve notes in wallets and tills, came to $2.43 trillion. The Treasury General Account, the US government's cash account at the Fed, held $0.98 trillion. Together, these three made up 94% of the Fed's liabilities.

Reverse repos made up $0.36 trillion. In a reverse repo, the Fed borrows cash overnight and hands over bonds as security.

The last sliver, $84.4 billion, is a net figure. It holds the Fed's capital plus other deposits and liabilities. The Fed's running loss since 2022, $233.1 billion, is subtracted from this line.

The Fed books that loss as a "deferred asset". We explain it in What Is Quantitative Easing?

The table compares three Wednesdays: before the 2008 crisis, the April 2022 peak and the latest week.

Source: Federal Reserve (H.4.1), via FRED (WALCL, TREAST, WSHOMCB, WLFN, WRBWFRBL, WDTGAL, WLRRAL); YX Insights

In August 2008, total assets were $910 billion. Currency made up 87% of the balance sheet, while reserves were close to zero.

In the crisis, the Fed lent heavily to banks and markets. Its assets other than Treasuries and MBS peaked at $1.78 trillion on 17 December 2008.

Quantitative Easing (QE), large-scale bond buying paid for with new reserves, then replaced the loans with bonds. Four rounds took total assets to a peak of $8.97 trillion on 13 April 2022. We cover each round in What Is Quantitative Easing?

The chart stacks what the Fed owes. The top of the stack equals total assets, so it rises and falls with them.

Currency grew in every calendar year since 2008. It tripled, from $0.80 trillion in August 2008 to $2.43 trillion. Growth in currency drains reserves unless the Fed adds assets to match, according to the New York Fed.

Reserves took most of the money created by QE. We explain them in What Are Bank Reserves?

The Treasury General Account swings with tax receipts and government borrowing.

Reverse repos swelled from 2021 to 2023, as money market funds lent cash through the Overnight Reverse Repo Facility. We explain it in What Is the Reverse Repo Facility?

Quantitative Tightening (QT) is the reverse of QE. The Fed lets bonds mature without buying new ones, so the balance sheet shrinks.

The latest round started on 1 June 2022. After a three-month phase-in, up to $60 billion of Treasuries and $35 billion of MBS could run off each month. The Treasury cap fell to $25 billion a month from June 2024, then to $5 billion from April 2025.

On 29 October 2025, the Federal Open Market Committee (FOMC), the Fed's rate-setting committee, decided to end QT on 1 December. From that date, every maturing Treasury is replaced. Repayments on MBS are reinvested in Treasury bills.

The chart shows the two holdings that changed most. MBS kept falling, because homeowners repay their loans and the Fed no longer buys new MBS. They fell from $2.43 trillion in January 2024 to $1.90 trillion.

Bills held were flat at about $0.20 trillion until December 2025. They then rose to $0.56 trillion.

Part of that rise is reinvested MBS repayments. The rest came from bill purchases made to hold reserves steady, which the Fed calls reserve management purchases.

On 10 December 2025, the FOMC judged that reserves had fallen to ample levels. Ample means enough that small changes in supply barely move overnight interest rates. The FOMC began the purchases to keep reserves there.

The New York Fed, which makes the purchases, started at $40 billion a month. It cut the pace to $25 billion in mid-April 2026 and to $10 billion in mid-May. Since mid-August, it has made none.

Roberto Perli, who runs the New York Fed's market operations, said in September that reserves looked likely to stay ample without them.

From 3 December 2025 to 30 September 2026, bills held rose by $364.7 billion, while MBS fell by $155.6 billion. Total assets grew by $207.3 billion, from a low of $6.54 trillion.

Losses. From September 2022, the interest the Fed paid out, mainly on reserves, cost more than its bonds earned. We explain the rate on reserves in How the Fed Sets Rates. The running loss stood at $233.1 billion on 30 September 2026. The Fed must earn it back before it sends profits to the US Treasury again.

Reserves running short. In September 2019, reserves fell to $1.39 trillion, their lowest since 2011. An overnight rate on loans backed by Treasury bonds jumped to 5.25%. The Fed Funds Rate, the rate banks charge each other for overnight loans, had a target range of 2% to 2.25%.

Perli said in May 2026 that without the bill purchases, April tax payments would likely have pushed reserves below ample levels.

The Fed's balance sheet sets what it owns, mostly bonds, against what it owes, mostly banknotes, reserves and the government's cash. It held $6.74 trillion on 30 September 2026. That is down from $8.97 trillion in 2022, but up since QT ended in December 2025.

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The Fed's balance sheet held $6.74 trillion of assets on 30 September 2026. That is down from a peak of $8.97 trillion in April 2022, but far above the $910 billion of August 2008. US Treasury securities made up $4.56 trillion. Mortgage-backed securities, bonds built from home loans, made up $1.90 trillion.

The Fed's balance sheet is growing slowly again. It hit a low of $6.54 trillion on 3 December 2025, just after Quantitative Tightening ended. By 30 September 2026, it had grown by $207.3 billion. The Fed stopped its extra bill purchases for reserves in mid-August 2026, but it still reinvests mortgage repayments in Treasury bills.

When the Fed shrinks its assets, its liabilities shrink by the same amount. From June 2022 to December 2025, Quantitative Tightening cut total assets by $2.38 trillion. Cash in the Overnight Reverse Repo Facility fell by $1.96 trillion, while bank reserves fell by $0.46 trillion. Shrinking too far can leave banks short of reserves.

The Fed does not print banknotes to buy bonds. It pays by crediting new reserves to the seller's bank, money that exists only in accounts at the Fed. Banknotes grow separately, as people ask for cash. Whether bond buying raises prices is a separate question, covered in Does Money Printing Cause Inflation?

DISCLAIMER: This article is strictly educational. Any information or analysis in this note is not an offer to sell or the solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice and nor should it be relied upon to make investment decisions. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note's date of publication and are subject to change without notice.