On January 15, the U.S. House Committee on Financial Services released quotes from its members on the role of the Fed’s balance sheet, focusing on how it has expanded over time and shifted in purpose. The committee discussed how mismanagement may create economic and financial risks, including inflation and strains in Treasury market operations. Committee members highlighted that the Fed’s balance sheet grew “dramatically” in the past 15 years, rising from less than $1 trillion in 2008, or 6 percent of GDP, to almost $9 trillion in 2022, or 35 percent of GDP.

Members raised concerns about the sustainability of this growth, noting that if the Fed enters the next recession with a $6 trillion balance sheet, it would likely need to purchase more assets on top of its already elevated holdings, raising questions about the long-term viability of this asset-buying strategy.