Federal Reserve Adds $2B in MBS, $68M in Treasuries

The Federal Reserve added to its balance sheet in the past week. To this point in Q2, the Fed has reduced its balance sheet by $34 billion out of a planned $90 billion.

Here's the weekly change in the Fed balance sheet against the weekly change in the Fed's balance sheet. To my eye they are still showing correlation. The bull case is the choppy market is lining up. The bear case is the Fed has been propping up the market and it's all downhill from here.

This second chart is the S&P 500 compared to Federal Reserve balance sheet, both indexed to 100 as of December 31, 2017.