The Fed’s at it again.
After the massive quantitative easing programs of the 2010s and pandemic era, the Fed’s balance sheet had ballooned to unprecedented levels.
The strain was so extreme, in fact, that in September 2022 the Federal Reserve went “bankrupt” for the first time in its 113-year history, an accounting oddity that would have seemed unthinkable to earlier generations of central bankers.
The Federal Reserve’s pandemic-era crisis spending helped fuel historic inflation. The balance sheet has quietly grown again by $42 billion in February 2026. (Source: Wolf Street)
In response to “raging inflation” in 2023, the Fed, under Jerome Powell’s direction, had been trying to repair its expansive balance sheet by selling assets.
That effort ended on December 2, 2025.
In February of this year, the Fed balance sheet again expanded by $42 billion — a small number compared with the trillions created during past QE waves, but a clear signal that the tightening cycle is over.
“The Fed is preparing itself to come in and bailout the private credit providers that are seizing right now,” adds our portfolio hawk, Andrew Packer.
In the Grey Swan Trading Fraternity, Andrew has issued a trade alert to protect your wealth if the financial stocks get into serious trouble and try to drag the market down with them.
He’ll have more to add to the story for our Trading Fraternity members in their weekly livestream this afternoon. Details below.
As noted yesterday, several macro trends are unfolding in the stock market. The late 2020s are shaping up to be in an economic era all on their own: sell financials, buy energy. We’ll take a closer look this afternoon.
~ Addison
P.S. With the war on and lines backing up at TSA checkpoints across the nation, it seems like an odd week to be traveling. Then again…
It’s also a good week to visit old friends in Panama! This week, Grey Swan Live! will be recorded on scene in Panama City.
We’re traveling to join The Gathering, a group of investors in an international real estate; project led by friend and associate Ronan McMahon and his team at Real Estate Trend Alert.
Ronan stuck in the sand in Baja California – living the life!
Along with Alfredo Alemán we’ll be examining Panama’s 20-year outlook in a world where chokepoints and liquidity matter more than headlines. As well as some choice properties in Panama’s most cosmopolitan city.
The Ipanema and Beachwalk briefings will provide us with context on jurisdiction, infrastructure, and the long-term prospects for allocating some of our capital to vacation rentals across Latin America and in select places in Europe.
We’re looking forward to it. The Gathering was a unique experience in Playa del Carmen, Mexico last year. We expect nothing less of Panama City this year. Learn more here…
