The way to interpret this is that there is wide latitude in the market tolerance of US dollars.
Think of it like share dilution. For example, without corresponding demand, Tesla can issue 20% more shares arbitrarily, and the price of a share will drop 20%, or Tesla can wait for excessive demand and issue 20% more shares and the price of a share will stay the same because the market clamored for them. Maybe the price of Tesla would have gone 20% higher if they didn't issue those additional shares? Or maybe interested buyers were waiting for a moment to purchase many at once without affecting the market.
Fiat currencies are in the same place. Forget about the cognitive dissonance where currencies are tied to your national identity and comparisons to private shares therefore cause trepidation. The functionality is similar, we just use different terms. Share dilution = inflation.
As long as the relative purchasing power of a dollar, compared only to other currencies, is managed, the Federal Reserve can purchase as much as it wants. When the Federal Reserve purchases things, each transaction creates new dollars. The recipient has dollars that didn't exist prior and are just as fungible, slightly diluting the value of all other dollars (causing inflation). The Federal Reserve is fully capable of selling assets on its balance sheet, for existing dollars. Just options and choices that other market participants don't typically have.
The wide latitude in the side of the Fed's balance sheet comes from the weakness of other currencies. Central Banks around the world are doing the same thing, weakening those currencies, simultaneously actual people are selling their currency for US dollars. This increases the strength of the US dollar, and means the Federal Reserve can dilute it to weaken it. The long-standing predilection of the Fed, the President and Congress has been to not have a strong dollar, so you can predict what the Fed will consider doing based on macroeconomic events.
As long as all currencies are being massively created, the Federal Reserve can do the same proportionally. The amounts don't matter in that regard. You just want to pay attention to the constraints on what it can buy, and if those constraints are being followed, and if there is enough things for it to buy to accomplish its goals (otherwise massive de-flation is likely, and harmful in our ability to predict our purchasing power or investment decisions)
Think of it like share dilution. For example, without corresponding demand, Tesla can issue 20% more shares arbitrarily, and the price of a share will drop 20%, or Tesla can wait for excessive demand and issue 20% more shares and the price of a share will stay the same because the market clamored for them. Maybe the price of Tesla would have gone 20% higher if they didn't issue those additional shares? Or maybe interested buyers were waiting for a moment to purchase many at once without affecting the market.
Fiat currencies are in the same place. Forget about the cognitive dissonance where currencies are tied to your national identity and comparisons to private shares therefore cause trepidation. The functionality is similar, we just use different terms. Share dilution = inflation.
As long as the relative purchasing power of a dollar, compared only to other currencies, is managed, the Federal Reserve can purchase as much as it wants. When the Federal Reserve purchases things, each transaction creates new dollars. The recipient has dollars that didn't exist prior and are just as fungible, slightly diluting the value of all other dollars (causing inflation). The Federal Reserve is fully capable of selling assets on its balance sheet, for existing dollars. Just options and choices that other market participants don't typically have.
The wide latitude in the side of the Fed's balance sheet comes from the weakness of other currencies. Central Banks around the world are doing the same thing, weakening those currencies, simultaneously actual people are selling their currency for US dollars. This increases the strength of the US dollar, and means the Federal Reserve can dilute it to weaken it. The long-standing predilection of the Fed, the President and Congress has been to not have a strong dollar, so you can predict what the Fed will consider doing based on macroeconomic events.
As long as all currencies are being massively created, the Federal Reserve can do the same proportionally. The amounts don't matter in that regard. You just want to pay attention to the constraints on what it can buy, and if those constraints are being followed, and if there is enough things for it to buy to accomplish its goals (otherwise massive de-flation is likely, and harmful in our ability to predict our purchasing power or investment decisions)