Higher carrots and tougher sanctions now while it seems that the risk of a full blown currency wars are now at diminished both economies have been ravaged by the ongoing trade war so after all the dust settles who is in better shape now lets take a look at this this shows the 4 major Central Banks the e. C. B. The bank of japan the peoples bank of china and the fed over in red and their total assets so what do you notice here this is a really interesting trend right now because all of the worlds Central Banks are kind of converging together and coming together at a very similar valuation up here but then theres the one the fed thats actually breaking the trend here everyone else has come to an equal stance at about 5. 2 trillion in assets but the fed has been on autopilot to reduce its Balance Sheet the reverse of everybody else they did so through a series of quantitative tightening starting at the end of 2017 but now this has resulted in a liquidity drain that is tightening the u. S.