The world’s top central banks have reportedly stopped shrinking their books, a strategy they used last year to combat inflation through a program which destabilized risky assets including cryptocurrency.

The quantitative tightening has ended and the balance sheets of the major central banks – the U.S. Federal Reserve, European Central Bank, Bank of England and Bank of Japan – have troughed. This is according to the data tracked by the macroeconomic research firm TS Lombard. It was sourced from The Market Ear Newsletter.

The ‘delta’ of the delta has been reversed recently. The Market Ear’s Thursday edition said that the drop in the size the bank’s balance sheets could be a tailwind.

(TS Lombard, The Market Ear) (TS Lombard, The Market Ear) Central bank balance sheet appear to be in a trough. (TS Lombard The Market Ear).

Bitcoin and other risky assets are viewed as bullish by many when central bank balance sheets expand.

According to the theory of 18th-century Irish-French economist Richard Cantillon, entities in the financial markets are frequently the first receivers the newly created money through balance sheet expansion. These entities use money to increase asset prices.

It is not yet clear whether the recent Fed extension of loans to local lenders result fresh money creation. The BOJ is printing money by purchasing bonds, compensating the ECB’s and BOE’s shrinkage. Recently, the Chinese credit surge reached its bottom as a sign that credit is expanding relative to the size the economy.

Sheldon Reback is the editor.