Fed Balance Sheet is Now at All-Time High & It's Just the Beginning

Now that the Senate has passed a pork-laden Super Corona Relief Bill worth $2 trillion in direct relief to individuals and businesses, we wait to see if the House of Representatives will just rubber stamp it, which is what everybody expects they will do via unanimous voice vote on Friday morning at 9 am.

But what does it mean? A rundown of the money reveals:

• $250 billion for a one-time payment to many individuals that includes $1200 per middle-class person (salary under $75,000) plus $500 per kid
• $250 billion for unemployment claims, which are expected to exceed 1.8 million new claims this week
• $350 billion in small business loans
• $150 billion for state and local governments

Ok, that's $1 trillion. We're halfway there. What else is there?

• $130 billion for hospitals
• $500 billion for corporate bailouts including the airlines, cruise lines, transportation sector

Now we're up to $1.63 trillion... So I'm guessing that the other $370 billion is just a bunch of pork to pacify all the corporate overlords of our lovely Congressmen and women. If anyone has any other specifics as to where this mystery money is going, please let me know. Otherwise, I'll just assume the worst because, well, you know, American politics.

The absolutely insane thing about all this is that the $2 trillion pales in comparison to the $4 trillion in commitments made by the Federal Reserve, which are already going on as we speak in the form of $100 billion-plus per day of purchases of Treasuries and federally-backed mortgages.

All of it leads me to the following graphic and important hypothetical question: Where will the below Fed balance sheet, which you can track the weekly totals here on FRED be by the end of this month? Where will it be by the end of this coronavirus crisis? How about by next mid-term election?

The answers that pundits are providing all over the place. What we do know is that, at $4.67 trillion, the Federal Reserve Balance Sheet, on March 18, 2020 stood at its highest level ever. Given what the stock market has done the past 2 days after claims of the Fed's "infinite cash", i.e. straight the fuck up, we can only imagine that we're somewhere pretty close to the $5 trillion level right now.

So maybe we need to be asking where we'll be by the end of this week!

I agree with a lot of the pundits who are saying $10 trillion is within reach. In fact, I'm willing to even put a time frame on it. I'll say we hit $10 trillion on the Fed balance sheet this year. Then I think we'll get high off our own supply and end up somewhere around $15-$20 trillion two years after this presidential election. That's just one man's opinion.

This stuff be cray.

Stay safe and stay sane out there, y'all!