The Treasury General Account and the Fed’s Balance Sheet

Roc Armenter

No 26-48, Working Papers from Federal Reserve Bank of Philadelphia

Abstract: Changes in the Treasury’s cash management practices after the COVID pandemic in-creased the Fed’s balance sheet by as much as 2 percentage points of nominal GDP, including the larger buffer required to maintain ample reserve levels. A parsimonious time-series model shows that, once we account for the impact of the Treasury’s extraor-dinary measures during debt-ceiling episodes, the observed changes in the Treasury General Account since COVID are mostly driven by higher target balances. An effec-tive sterilization program by the Fed would require timely and accurate information at high frequencies.

Keywords: monetary policy; ample reserves; COVID-19; Fed balance sheet (search for similar items in EconPapers)
Pages: 23
Date: 2026-10-16
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DOI: 10.21799/frbp.wp.2026.48

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