2026-01-18 20:22:05

A set of data worth noting: The Federal Reserve's balance sheet has recently increased by $105 billion, but the allocation ratio is quite unusual. $43.1 billion flowed into mortgage-backed securities (MBS), while traditional core assets like government bonds only increased by $31.5 billion. What does this indicate? The Federal Reserve is absorbing higher-risk assets. Many analysts believe this reflects internal pressures within the financial system—and we may not have fully understood it yet.

Beneath the calm surface, currents are surging. The Federal Reserve officially ended years of quantitative tightening (QT) at the end of 2025 and instead launched a new operation called "Reserve Management Purchases" (RMP). Officially, this is to maintain liquidity in the banking system, but the hundreds of billions of dollars in monthly bond purchases have long been transparent to market participants—this is essentially quantitative easing under a different name. Some even directly state that, given the enormous government debt pressure, this operation is close to debt monetization.

Economist Peter Schiff recently issued a sharp warning. He believes that these series of actions by the Federal Reserve expose systemic pressures beneath the financial surface and predicts that the balance sheet could surpass $10 trillion in 2026. Once that happens, stronger inflationary pressures are imminent. The macro landscape of 2026 is gradually taking shape amid this game of "fiscal-driven" and "policy stabilization."

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GameFiCritic

· 5h ago

The proportion of MBS has skyrocketed, while government bonds are being marginalized. This allocation logic is truly bizarre. The signal of risk transfer indicates that internal system pressures are so high that this operation is unavoidable. Changing the soup without changing the medicine, RMP essentially boils down to QE 2.0, and there's nothing wrong with the label of debt monetization. 1 trillion yuan is not a dream; with inflation making a comeback at the corner, 2026 might really see a re-pricing of all assets.

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AirdropDreamer

· 5h ago

Here comes another mask to play QE, do they really think we are all fools? RMP is just QE2.0, and they still have the nerve to call it "Reserve Management," laughable. What does the surge in MBS indicate? It shows the financial system is plugging holes. Shiff is once again alarmist, but this time it seems he's not talking nonsense. A balance sheet of 10 trillion dollars, inflation is about to take off, and wallets will shrink again. Debt monetization, the common people will foot the bill. The Federal Reserve's recent moves seem a bit panicked; all previous tightening was in vain. They are starting to loosen again at the end of the year, cyclically cutting the grass.

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GoldDiggerDuck

· 5h ago

Still changing things up to print money, truly impressive Wait, MBS can't even be fully bought, and now they want government bonds? This financial system is sick Schiff is starting to shout again, but this time it seems he's not talking nonsense 100 trillion? I might as well just eat dirt Is this what they call "maintaining liquidity"? Haha, debt monetization sounds more accurate Surface calm with holes opening one after another underneath, why not just say it directly RMP is just a rebrand, still scam retail investors Inflation is coming, everyone, get ready for your fiat currency's plunge performance

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DevChive

· 5h ago

It's the same old story, different packaging. I've seen this routine too many times. Buying this much MBS clearly indicates someone is in a hurry to offload their baggage. Shiv's predictions are just for listening; I find ten trillion dollars hard to believe, but inflation? That's really coming. The term debt monetization can't be spoken aloud; it's basically the entire RMP, bureaucrats. 2026 is expected to be even more intense than 2024. Be mentally prepared, everyone. This isn't a crisis; it's a systemic long-term pressure. We're all on this boat together.

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GasFeeAssassin

· 6h ago

It's the same old story with a new disguise, RMP is just QE with a different name. What is the Federal Reserve betting on? This time, instead of buying government bonds, they are hoarding MBS. It feels like they're digging their own grave. 1 trillion yuan will really come, and if inflation picks up again, our assets will depreciate once more.

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