| Series | First | Latest | Min | Max |
|---|---|---|---|---|
| S&P 500 (SPY) | 100.0 | 1310.9 | 93.6 | 1310.9 |
| Fed total assets | 100.0 | 929.8 | 99.4 | 1233.1 |
Latest chart point (2026-08-01) predates the newest source observation (2026-08-11); one input series may be lagging.
Index SPY and WALCL (both monthly avg) to 100 at the shared startSPDR S&P 500 ETF (SPY, daily adjusted close, Yahoo Finance) and total Federal Reserve assets (WALCL, weekly, millions of dollars, FRED), both rebased to 100 at their shared start. Both are averaged to monthly so the lines share an axis. QE expands WALCL; a tight pairing between the lines is often read as 'liquidity-driven' equity markets, though the correlation is not causal. SPY's adjusted close reflects total return.
As of August 2026, the S&P 500 (SPY) line stands at 1310.9 and the Fed total assets line at 929.8 (both base = 100 at the shared start). The S&P 500 (SPY) line is up 21.7% over the past year and above its long-run median of 274.7.
When the SPY line climbs above the WALCL line, equities have outpaced the growth of the Federal Reserve's balance sheet. Because quantitative easing expands WALCL directly, periods where the two lines rise together are often described as liquidity-driven markets, though the correlation is not causal: equities also respond to earnings, rates, valuations and risk appetite.
WALCL is total Federal Reserve assets, published weekly: it expands when the Fed buys securities (QE) and contracts when it lets holdings run off (QT). Scaling equities by WALCL asks whether stock prices have kept pace with the stock of central-bank liquidity, the direct test of the 'Fed-driven market' narrative that has dominated post-2008 commentary.
WALCL is a stock, not a flow, so it cannot capture the pace of liquidity injection or withdrawal in real time. The correlation between the two lines is well-documented but not causal: both respond to the same macroeconomic conditions, and equities are also driven by earnings and valuations that the balance sheet does not measure. SPY is a total-return price series, so it reflects reinvested dividends. Treat the chart as context for the liquidity narrative, not investment advice.
On the rebased scale (100 at the December 2002 start), the Fed balance sheet peaked near 1,233 in April 2022 at the top of the pandemic-era expansion and has since contracted to roughly 928 as the Fed runs off holdings, while SPY has continued to make new highs above 1,274. The current gap, with equities at highs and the balance sheet below its peak, means the recent rally has happened despite balance-sheet contraction, not because of expansion. That is a direct counterexample to a strict liquidity-driven reading of the market.
The post-2008 thesis that equity gains are driven by central-bank liquidity rather than fundamentals is the question this chart exists to answer. A tight pairing between the SPY and WALCL lines is read as evidence for the liquidity-driven view; a wide gap with equities above the balance sheet is read as evidence against it. The current gap, with equities at highs and the balance sheet contracting, is the strongest counterexample in the dataset.
Strategists tracking the macro effect of quantitative easing and tightening use this ratio to see whether equity prices are running ahead of or behind the stock of central-bank reserves. The April 2022 WALCL peak marks the end of the pandemic-era expansion and the start of the runoff regime, a widely cited inflection point in the QE-to-QT transition.
Because both lines are rebased to the same start, the spread between them is a clean measure of how much of the equity rally cannot be attributed to balance-sheet growth alone. Strategists use that residual as a rough proxy for the portion of equity returns driven by earnings, valuations, or non-balance-sheet liquidity rather than direct central-bank expansion.
As of August 2026, the S&P 500 (SPY) line stands at 1310.9 and the Fed total assets line at 929.8 (both base = 100 at the shared start). The S&P 500 (SPY) line is up 21.7% over the past year and above its long-run median of 274.7.
This benchmark is built on monthly data. The page is refreshed when the source publishes new observations; the freshness block below the chart shows the exact data-through date and when PIER20 last fetched the file.
The chart is built from S&P 500 (SPY) and Fed total assets, sourced from the Federal Reserve Economic Data (FRED) service and Yahoo Finance.
The correlation is well-documented but not causal. Both the Fed balance sheet and equity prices respond to the same macroeconomic conditions, and equities are also driven by earnings, valuations and risk appetite that the balance sheet does not measure. Notably, SPY has continued to make new highs while the Fed balance sheet has contracted below its April 2022 peak, which is hard to square with a strict liquidity-driven reading.
On the rebased scale (100 at December 2002), the Fed balance sheet peaked near 1,233 in April 2022 and has since contracted to roughly 928. SPY bottomed near 94 in early 2003 and has risen above 1,274 at its latest reading, its all-time high on this series.
This chart compares equities to the Federal Reserve's balance sheet (WALCL), which expands and contracts with QE and QT. Total US stock market vs M2 compares equities to the broad money supply (M2SL), which the public and banks create through deposits and lending. The two track different forms of liquidity: central-bank reserves vs broad money in circulation.
CPI measures consumer prices; the Fed balance sheet measures central-bank liquidity. Stocks vs CPI shows purchasing-power preservation; stocks vs the balance sheet tests the 'Fed-driven market' narrative directly. PIER20 publishes both perspectives across the liquidity cluster.
One tested idea, through the evidence stack. No migration of any kind.