Central Banks
Reserves at Fed Sink Below $3 Trillion to the Lowest Since 2020
- The $326 billion drop in week to Jan. 1 was biggest since 2022
- Officials have been shrinking balance sheet since June 2022
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The US banking system’s reserves, a key factor in the Federal Reserve’s decision to keep shrinking its balance sheet, tumbled below $3 trillion to the lowest since October 2020.
Bank reserves fell by about $326 billion in the week through Jan. 1 to $2.89 trillion, according to Fed data released on Thursday. That’s the largest weekly slide in over two-and—a-half years.