Fed Freezes $6.6T Balance Sheet to Stabilize Markets Amid Crypto Shifts and Earnings Divergence

The Federal Reserve announced on November 19, 2025, that it would cease its quantitative tightening (QT) program, effectively ending the three-year effort to shrink its balance sheet. This decision, outlined in a policy statement, marks a shift in monetary strategy as officials aim to stabilize liquidity in financial markets amid evolving economic conditions. The Fed's balance sheet, which had contracted from a peak of $9 trillion to approximately $6.6 trillion, will now remain at its current size, with officials citing the need to support employment and inflation targets.

Corporate earnings reports from key sectors reflected a mixed landscape. Quorum, a provider of enterprise software solutions, reported a 14% decline in adjusted EBITDA to $1.9 million for Q3 2025, driven by lower SaaS revenue and margin pressures. In contrast, GDS Holdings Limited, a data center operator, maintained its 2025 revenue guidance despite a temporary dip in utilization rates to 74.4%, attributed to new facility ramp-ups. Meanwhile, crypto exchange Bullish swung to a profit in Q3, reporting net income of $18.5 million on adjusted revenue of $76.5 million, fueled by the launch of U.S. spot trading and crypto options.

The Fed's decision to halt QT aligns with broader regulatory shifts. Federal Reserve Governor Stephen Miran emphasized that easing financial regulations could enable the central bank to shrink its balance sheet further in the future, provided bank systems adapt to reduced liquidity support. Miran also noted that lower regulatory burdens might reduce perceptions of the Fed "picking winners and losers" through asset purchases. However, critics argue that the Fed's expanded fiscal coordination-highlighted by Real Vision founder Raoul Pal-signals a shift in liquidity control from the Fed to the Treasury Department, potentially undermining central bank independence.

In the crypto space, Uniswap's UNIfication proposal sparked debate. The decentralized exchange (DEX) leader plans to allocate 20 million UNI tokens annually to fund ecosystem initiatives, a move supporters call necessary for growth but critics label a "tax on success" that could dilute token value. This follows Bullish's successful foray into U.S. markets, where it reported over $1 billion in options trading volume within a quarter.

The Fed's pivot, coupled with divergent corporate performance and crypto market dynamics, underscores a complex economic environment. While central banks grapple with balancing inflation control and financial stability, businesses and blockchain projects are recalibrating strategies to navigate regulatory and market shifts. As 2025 draws to a close, investors remain focused on how these developments will shape liquidity, interest rates, and the broader digital asset landscape.