G4 central bank balance sheets expand to 40% of GDP

Balance sheets of G4 central banks – the Bank of England (BOE), the Bank of Japan (BOJ), the Federal Reserve (FED), and the European Central Bank (ECB) – have expanded to 40% of gross domestic product, Jeroen Blokland,  Portfolio Manager for the Robeco Multi-Asset funds, Robeco ONE and Robeco Pension Return Portfolio, tweeted on Thursday.     

The balance sheet expansion could be attributed to the massive monetary policy stimulus recently launched by these central banks to help contain the economic fallout from the coronavirus outbreak. 

Notably, the Fed is running an open-ended asset purchase program (unlimited QE). Its balance sheet has already expanded to record $6 trillion. 

Historically, the Fed's balance sheet expansion has boded well for gold, a hedge against inflationary policies.