Federal Reserve Watch: New Stance

John M. Mason17.9K FollowersFollow5ShareSavePlay(8min)CommentsSummaryThe Federal Reserve ended nearly four years of quantitative tightening, reducing its securities portfolio by $2.2 trillion while the economy and markets thrived.Despite tightening, real GDP grew steadily, unemployment rose only modestly, and the S&P 500 nearly doubled, hitting lots and lots of new historic highs.Massive liquidity injected during the pandemic left commercial banks with nearly $3 trillion in excess reserves, supporting economic and market resilience.The Fed now shifts to modest weekly securities purchases, but banking system liquidity remains exceptionally high, keeping systemic risks low. Bet_Noire/iStock via Getty Images The Federal Reserve is moving on to its next round of monetary policy. With November 2025 ending and December 2025 starting, the Federal Reserve brings to an end three years and eight months of "quantitative tightening."This article was written byJohn M. Mason17.9K FollowersFollowJohn M. Mason writes on current monetary and financial events. He is the founder and CEO of New Finance, LLC. Dr. Mason has been President and CEO of two publicly traded financial institutions and the executive vice president and CFO of a third. He has also served as a special assistant to the secretary of the Department of Housing and Urban Development in Washington, D. C. and as a senior economist within the Federal Reserve System. He formerly was on the faculty of the Finance Department, Wharton School, the University of Pennsylvania and was a professor at Penn State University and taught in both the Management Division and the Engineering Division. Dr. Mason has served on the boards of venture capital funds and other private equity funds. He has worked with young entrepreneurs, especially within the urban environment, starting or running companies primarily connected with Information Technology.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.Recommended For You