SERIES: BAMLH0A0HYM2 (3.26)
VIXCLS (17.2)
INDPRO (103.9506)
UMCSENT (48.1)
CPIAUCSL (336.298)
CPILFESL (338.896)
DCOILWTICO (103.37)
MORTGAGE30US (7.24)
PCEPI (132.257)
ICSA (194000)
PAYEMS (159044)
UNRATE (4.2)
M2SL (23413.9)
NETLIQ (5745.73)
RRPONTSYD (4.375)
WALCL (6745635)
WTREGEN (999727)
DFII10 (2.63)
DGS10 (4.98)
DGS2 (4.61)
FEDFUNDS (3.75)
SOFR (3.94)
T10Y2Y (0.38)
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 | CORRELATION BAR (-1 TO +1) | 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) |
|---|---|---|---|
| NVDA Technology | $213.66 | -0.80% | + 0.00 |
| AAPL Technology | $348.91 | +1.48% | + 0.00 |
| MSFT Technology | $530.14 | -0.16% | + 0.00 |
| GOOGL Communication Services | $283.82 | -12.64% | + 0.00 |
| GOOG Communication Services | $282.32 | -12.29% | + 0.00 |
| AMZN Consumer Discretionary | $243.79 | -4.25% | + 0.00 |
| TSM Technology | $431.81 | -1.75% | + 0.00 |
| SPCX Technology | $143.89 | -0.92% | + 0.00 |
| AVGO Technology | $345.00 | -1.94% | + 0.00 |
| META Communication Services | $624.52 | +1.96% | + 0.00 |