Markets Weekly Notes
Jan 5 – Jan 11 · 2026-W02
1 event this week
🧠 Feynman Takeaway
The Fed started quietly expanding its balance sheet — the first hint that monetary policy was loosening behind the scenes.
Fed begins Reserve Management Purchases
In plain English
The Fed started buying ~$250B in Treasury bills through its SOMA portfolio. This wasn't QE (they called it 'Reserve Management Purchases'), but the effect was the same: more liquidity in the banking system. The balance sheet grew to ~$6.7T.
Analogy
Imagine a bartender saying 'I'm not giving anyone free drinks, I'm just... topping up everyone's glass a bit.' That's the Fed doing RMPs — technically not QE, practically the same result: more money sloshing around.
Why it matters
This was the first hint that monetary policy was easing behind the scenes, even as rates stayed at 3.5-3.75%. By year-end, the balance sheet would be materially larger.