I used ChatGPT to collect some economic data, which can be checked and verified on the Federal Reserve's website (which I strongly recommend, not only on this topic but everything).

I took a screenshot that turned out poorly when trying to copy and paste, learning to use AI, haha.

The FED, with its monetary policy, defined in part by the FOMC, through the SOMA, injects dollars into the market, providing bank liquidity, and thus controlling and adjusting the dollar's monetary expansion, consequently affecting inflation.

SOMA - System Open Market Account.

FOMC - Federal Open Market Committee

The FED's balance sheet in 2020/2022 increased from about 4.5 trillion dollars to almost 9 trillion!!!

To understand, every month, the FED with the SOMA injected 60 billion dollars into the market.

In April 2020, in ONE MONTH, it injected 1.5 trillion dollars.

Since 2022, it started to reduce the pace. The reflection of so much money injected? High inflation, rising prices, stocks soaring, everyone taking on a lot of risks, liquidity exploding, everything was rising in this cycle.

In comparison:

balance 2022 8.5 trillion - monthly bond buybacks in OMO backed by MBS of 165 billion.

2023 reduction to 7.5 trillion balance and 95 billion monthly

2024 reduction to 6.5 trillion

We reach 2025, what was 65 billion monthly of dollar injection through SOMA last year has reduced to 35 billion.

And now, IN APRIL, from 35 billion it dropped to 5 billion.

Everyone expected it to return to 30~35 billion, however, with the tariffs affecting inflation, if they maintain the amount, it will increase inflation even more.

Clearly, we are without liquidity in the capital markets, we have become spoiled (since 2008 and this madness of money by the FED)

The screenshots I took from ChatGPT, I couldn't extract the text properly. Be patient, you will also grow old.

As it is a more complex topic, I tried to address it superficially. That said, on Saturday I will write my interpretation and opinion on what lies ahead (what has been said so far are data and not opinions)

can be checked: www.federalreserve.gov