Here’s something interesting, possibly disturbing, that I just noticed while prepping for a radio interview:
The red line shows that since the “taper” ended, the Fed has been treading water with its assets, rolling over bonds as they mature but not letting its total holdings drop.
On the other hand, the blue line shows the total reserves in the banking system. I’m not sure why it bounces around so much, or why it has dropped ~$230 billion since late December. There is no seasonal adjustment on the blue line, but the other dips didn’t occur in Dec/Jan.