Bank of America predicts that the Federal Reserve will increase its holdings by $45 billion in assets each month, expanding its $6.5 trillion balance sheet.

According to CoinWorld, while the market is generally focused on the Federal Reserve’s December interest rate decision, traders have begun to pay attention to whether the Fed will expand its $6.5 trillion balance sheet. Michael Kelly, Global Head of Multi-Asset at PineBridge Investments, stated that the market is watching whether the Fed will keep its balance sheet unchanged or start expanding it. Bank of America strategists predict that the Fed will announce this week that, starting January 2026, it will expand its balance sheet by $45 billion per month. Of this, at least $20 billion per month will be used for the natural growth of the balance sheet, and $25 billion per month will be used to reverse the overconsumption of reserves. This action will last at least until the first half of 2026. Roger Hallam, Global Head of Rates at Vanguard Fixed Income, said that in the long run, the Fed will naturally start buying short-term Treasuries next year due to increased demand for reserves in the economy. Cathie Wood previously mentioned the Fed’s easing liquidity conditions and reiterated Ark Invest’s long-term forecast that the future price of Bitcoin will reach $1.5 million.