The reduction of the Fed's balance sheet means that the US government has announced the reduction of its balance sheet. This will lead to a decrease in the number of related currencies in the market, and the government will appreciate its currency by weakening its liquidity. When the inflation rate of a country becomes high, the central bank will implement the policy of shrinking the table. The premise of shrinking the table is that the employment situation in the United States recovers and the social and economic situation can repair itself and operate normally.

Brief introduction of the federal reserve

The Federal Reserve System of the United States is the central bank of the United States. Compared with other countries' central banks, the Federal Reserve came into being relatively late. Historically, the United States tried to establish a central bank like the Federal Reserve, but failed, because senators and presidents were worried that the central bank had too much power or that it would be bound by very few interests. This concern is mainly influenced by the national characteristics of the United States. In the early days of the People's Republic of China, the United States was a loose organization composed of some independent states in the form of federal government, and most administrative functions were mainly concentrated in the state government, not the federal government of the United States.