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Today, the House Financial Services Committee is holding a Monetary Policy, Treasury Market Resilience, and Economic Prosperity Task Force hearing, led by Task Force Chair Frank D. Lucas (OK-03), to examine the role the Federal Reserve's balance sheet plays in monetary policy implementation and the Treasury markets.

Read Task Force Chair Lucas’ opening remarks as prepared for delivery:

"Welcome to the first Task Force hearing of 2026.

"Our focus today is on the Fed’s balance sheet – a record of its assets and liabilities that demonstrate its operations.

"The Fed’s balance sheet has undergone dramatic changes in the past 15 years – growing from less than $1 trillion in 2008, or 6% of GDP, to almost $9 trillion in 2022, or 35% of GDP.

"In 2008, the Fed moved from a corridor system to a floor system necessarily demanding an increase in the quantity of reserves on its balance sheet.

"Despite that change, the Fed has continued to express the view that reserves should be at “the smallest levels” consistent with the effective implementation of monetary policy. 

"We haven’t always seen the Fed stick to that view, instead using its balance sheet to provide economic stimulus – not merely as a means to control rates.

"Since 2008, the Fed has engaged in four rounds of large-scale asset purchases, or QE, with its balance sheet standing at six and a half trillion today.

"Yet, the academic literature shows mixed results on the effectiveness of QE at economic support. While the jury is out on the benefits of QE, we do know that it raises risks of inflation and market distortion.

"The Fed should rely on conventional monetary policy tools under its ample reserves regime and avoid market operations that may have unintended and lasting consequences.

"Additionally, the Fed should clearly articulate under what conditions it uses its balance sheet for economic stimulus, economic contraction, and policy implementation in the future. This is particularly important now as the Fed engages in reserve management purchases. 

"Finally, it may be tempting to allow the news of the day to distract us from the purpose of today’s hearing. I will continue to emphasize that the independence of the Fed is critical in ensuring it makes sound interest rate decisions that are essential to favorable economic outcomes.

"We’d do well to remember that decisions made now have lasting implications for not just the next Fed chair, but the next ten Fed chairs.

"That said, let’s focus our discussion today on the proper use of the balance sheet and its impact on monetary policy implementation and Treasury market functioning.

"I yield back."