Introduction The balance sheet of the U.S. central bank—i.e., the Federal Reserve—plays a vital yet sometimes under-appreciated role in shaping monetary policy, financial markets, and the broader economy. By examining what the Fed owns (assets) and owes (liabilities), investors, economists and the public can gauge the central bank’s policy stance, financial strength and potential risks. Below we break down what the  Fed  balance sheet  is, how it operates, why it has grown so