Federal Reserve shifts to quantitative easing.

Federal Reserve shifts to quantitative easing. The Fed ended its quantitative tightening program in December 2025 and has begun adding securities back to its balance sheet. This monetary pivot comes as the Trump administration pursues fiscal expansion through increased military spending, particularly related to Iran conflict escalation. The administration is applying pressure on the Federal Reserve to maintain accommodative monetary policy despite Chairman Powell's apparent resistance. This combination of fiscal stimulus and monetary support represents a strategic effort to accelerate economic growth. The coordination between expansionary fiscal and monetary policies could have significant implications for inflation, interest rates, and market valuations going forward.