🔥Is the Fed doing “stealth QE”?

The Fed’s balance sheet has risen again:
- The latest peak ~$6.74T at the end of June — the highest since April 2025, up ~$200B (+3.1%) from the trough ~$6.53T at the beginning of December 2025
- Before that was 3.5 years of QT: From the peak ~$8.97T (04/2022) down to $6.53T, withdrawing ~$2.4T from the system
-> Official QT ended on 01/12/2025. From 12/12/2025, the Fed began buying T-bills via the “Reserve Management Purchases” (RMP) program, starting at $40B/month. The reason is that in Q4/2025 the repo market was under strain, the SRF was withdrawn sharply, and repo rates sometimes exceeded the Fed Funds ceiling.
If you look at an expanding balance sheet = rising liquidity = disguised QE, then it’s not wrong, but there’s a logical issue:
QE buys long-term bonds to compress long-term yields — RMP only buys T-bills under one year, doesn’t pull maturities out of the market, and doesn’t push long-term yields down. Meanwhile, the scale of RMP is being gradually cut: $40B/month (12/2025) down to about $10B/month (06/2026) — clearly more about management than QE.
In the most recent week, the balance sheet even dipped slightly, from $6.74T to $6.72T
This isn’t a story of the Fed quietly doing QE, but that the Fed is under pressure to stop QT earlier than planned. Kevin Warsh has long been publicly opposed to a bloated balance sheet since the QE2 era. Now he sits as Chair while the machine forces him to buy every month. To see what Warsh will do in the coming months.