the federal reserve now owns about a third of both the treasury and mortgagebackedsecurities markets as a result of its emergency assetbuying to prop up the us economy during the covid19 pandemic two years of socalled quantitative easing doubled the central bank’s balance sheet to 9 trillion equivalent to roughly 40 of the nation’s gross domestic product by adding so much liquidity to the financial system the fed helped fuel significant gains in the stock bond and housing markets and other investment assets now with inflation rampant the fed is unwinding this liquidity via a process known as quantitative tightening or qt in june the central bank started to shrink its portfolio by letting up to 30 billion of treasuries and 175 billion of mortgagebacked securities or mbs roll off its balance sheet or mature without reinvesting the proceeds the amount will double this month and effectively kicks in sept 15 as treasuries are redeemed midmonth and at the end of the month