Golden Finance reported that Cointelegraph analyst and writer Marcel Pechman analyzed in detail the impact of the Fed's balance sheet, how the Fed expanded its assets by $5 trillion between December 2019 and April 2022. The period of expansion coincided with a 38% plunge in the S&P 500, Pechman noted. Also, the Fed balance sheet crossed the $8.9 trillion mark as the stock market index hit a record high of 4,800.

The problem, Pechman said, is that the U.S. Treasury runs a huge deficit because government spending exceeds revenue and taxes. So it needs to start rolling over some of that debt instead of letting it mature, so it probably won't be able to continue shrinking its balance sheet, which has been a huge factor in lowering inflation.
Inflation will ultimately suffer the most once the Fed is forced to expand its balance sheet again, according to Pechman. He suggested that those holding scarce assets such as Apple stock, land, gold and bitcoin should hold on tight and not be fooled by a temporary drop in inflation.