FRED // WALCL

Federal Reserve Total Assets Balance Sheet (WALCL)

LIQUIDITY Weekly

OBSERVATION DATE: 2026-10-28 • UNIT: $M

LATEST OBSERVATION

6745635 $M

PRIOR / PERIOD Δ

6753604 ( -7969.00)

YOY CHANGE

+ 2.41 $M

WALCL // Federal Reserve Total Assets Balance Sheet (WALCL) ($M)1Y: +158601.00 (+2.4%)

2026-10-28OBSERVATION: 6,745,635 ($M)

11 S&P 500 GICS SECTOR PEARSON CORRELATION MATRIX VS. WALCL SORTED TAILWIND (+r) ──► HEADWIND (-r)

ETF	GICS SECTOR	PEARSON r	R²	BETA / REGIME TRANSMISSION
XLV	Health Care	+0.07 r	1%	[+0.43% per +1% delta] Low-beta regime neutral across 5Y WALCL cycle (261W)
XLP	Consumer Staples	+0.06 r	0%	[+0.28% per +1% delta] Low-beta regime neutral across 5Y WALCL cycle (261W)
XLE	Energy	+0.04 r	0%	[+0.38% per +1% delta] Low-beta regime neutral across 5Y WALCL cycle (261W)
XLB	Materials	+0.03 r	0%	[+0.24% per +1% delta] Low-beta regime neutral across 5Y WALCL cycle (261W)
XLU	Utilities	+0.03 r	0%	[+0.21% per +1% delta] Low-beta regime neutral across 5Y WALCL cycle (261W)
XLY	Consumer Discretionary	+0.02 r	0%	[+0.21% per +1% delta] Low-beta regime neutral across 5Y WALCL cycle (261W)
XLK	Technology	+0.01 r	0%	[+0.08% per +1% delta] Low-beta regime neutral across 5Y WALCL cycle (261W)
XLC	Communication Services	-0.00 r	0%	[-0.01% per +1% delta] Low-beta regime neutral across 5Y WALCL cycle (261W)
XLRE	Real Estate	-0.01 r	0%	[-0.07% per +1% delta] Low-beta regime neutral across 5Y WALCL cycle (261W)
XLI	Industrials	-0.02 r	0%	[-0.12% per +1% delta] Low-beta regime neutral across 5Y WALCL cycle (261W)
XLF	Financials	-0.02 r	0%	[-0.17% per +1% delta] Low-beta regime neutral across 5Y WALCL cycle (261W)

AI MACRO REGIME IMPACT BRIEF RESTRICTIVE

FED BALANCE SHEET CONTRACTION RESUMES: WALCL DROPS -$7,969M TO 6,745,635 $M AMID QUANTITATIVE TIGHTENING RUN-OFF

Total Federal Reserve assets (WALCL) contracted by -$7,969.000 $M week-over-week to 6,745,635 $M from 6,753,604 $M, reaffirming passive liquidity withdrawal near the upper boundary of its 52-week band (6,535,781 to 6,759,955 $M). Ongoing balance sheet attrition drains bank reserves and repo market slack, elevating term premia and exerting downward multiple compression on duration-sensitive equities. As high-powered central bank money recedes, asset markets face tighter collateral plumbing and wider credit-spread dispersion across leveraged balance sheets.

▲ REGIME TAILWIND SECTORS

XLF // Financials

Displays an inverse correlation to WALCL expansion (Pearson r = -0.02, Beta = -0.17%), benefiting from balance sheet run-off which removes central bank bid support from Treasuries, steepening the nominal yield curve and preserving net interest margins (NIM).

XLI // Industrials

Carries negative correlation to system liquidity expansion (Pearson r = -0.02, Beta = -0.12%), insulated by late-cycle capital goods backlogs and pricing power that outperform pure liquidity-driven multiple expansion plays during QT phases.

XLRE // Real Estate

Exhibits a negative correlation coefficient (Pearson r = -0.01, Beta = -0.07%) over the trailing cycle; with WALCL shedding -$7,969.000 $M in the latest week, defensive allocation rotations gravitate toward established prime real-asset yield vehicles over liquidity-dependent high-multiple growth.

▼ REGIME HEADWIND SECTORS

XLV // Health Care

Holds the highest positive correlation to Fed balance sheet levels (Pearson r = +0.07, Beta = +0.43%); the weekly -$7,969.000 $M liquidity drain strips away the defensive multiple re-rating tailwind that historically tracks gross system reserve growth.

XLP // Consumer Staples

Demonstrates positive balance sheet co-movement (Pearson r = +0.06, Beta = +0.28%); as WALCL declines to 6,745,635 $M, elevated alternative risk-free cash yields undermine high-dividend consumer bond proxies via discount-rate headwinds.

XLE // Energy

Maintains positive correlation to aggregate central bank liquidity (Pearson r = +0.04, Beta = +0.38%); ongoing Fed balance sheet drainage dampens global aggregate demand and commodity trade financing via a firmer trade-weighted dollar.

HISTORICAL ANALOG // 2018-2019 Fed QT Reserve Drain Phase: As the Federal Reserve maintained balance sheet reduction toward terminal run-off velocity, shrinking bank excess reserves drove collateral friction across funding markets and flattened equity multiple expansion. Factor leadership rotated aggressively away from low-volatility bond proxies toward cash-flow generative, asset-sensitive cyclical value, culminating in late-cycle repo volatility.

EQUITIES MOST SENSITIVE TO WALCL STOCK BETA

TICKER	LAST	% CHG	CORR (r)
GS Financials	$894.55	-3.58%	-0.68
XOM Energy	$187.25	+2.16%	+ 0.60
JPM Financials	$337.04	-1.90%	-0.59
AMZN Consumer Discretionary	$240.35	-1.41%	-0.52
AVGO Technology	$326.08	-5.48%	-0.51
AAPL Technology	$344.63	-1.23%	-0.48
NVDA Technology	$204.64	-4.22%	-0.47
CAT Industrials	$622.75	-3.81%	-0.45
NFLX Communication Services	$62.08	+0.05%	-0.43
GOOGL Communication Services	$279.84	-1.40%	-0.43