Fed’s balance sheet likely to hit a record high

Yahoo Finance’s Brian Cheung joins Zack Guzman to break down what to expect as the Fed's balance sheet will be updated after the bell on Thursday.

Video Transcript

ZACK GUZMAN: Welcome back to live coverage here on "The Ticker." We're going to spotlight some updates we're going to be getting from the Federal Reserve here, including what some people think might be a record fat balance sheet here.

And for more on that, I want to bring on Yahoo Finance's Fed reporter Brian Cheung. And Brian, I mean, that is potentially the expectations here. The balance sheet here at the Fed could reach a new record. What do you say?

BRIAN CHEUNG: Well, as we know, the Federal Reserve has been buying assets at breakneck pace since the beginning of this crisis, really. In the first months, the Federal Reserve added $3 trillion to its balance sheet as it flooded the market with US treasuries and mortgage-backed securities that it absorbed on its balance sheet. Obviously, it also has the 13 liquidity facilities backstopping everything from corporate debt to municipal bonds.

But the key number is going to be $7.17 trillion. That's the figure that the Fed needs to beat in order to hit a new record high. It's set to hit that with last week having ended the week at $7.15 trillion, which means that the Fed needs to add $20 billion. That sounds like a lot, but it's really just a drop in the bucket for the central bank to hit that new record.

Now as we know, the Federal Reserve really added most of those assets in the beginning of this crisis. It has since plateaued into the fall as the Federal Reserve wanted to see what would happen with the economic recovery.

But obviously, Zack, as we've heard from a number of Fed officials in the previous weeks, it does seem like the Fed is open to re-expanding, maybe accelerating, or at least, changing the targets of its quantitative easing program with the recovery slowing, which shows that if we hit a record today, there are signs that it could go even higher from that point. We'll get the print at 4:30, and we'll have the coverage of that right here on Yahoo Finance.