The Federal Reserve Bank of New York recently published an in-depth article examining the role of the Federal Reserve's balance sheet. The article highlights that as a crucial tool, the balance sheet of the Federal Reserve is not only indispensable to achieving the Federal Open Market Committee's (FOMC) monetary policy objectives, but also capable of promoting the stability of the financial system during exceptional circumstances. Typically, the FOMC sets the direction and intensity of monetary policy through adjustments to the target range of the federal funds rate. However, when interest rates approach zero, the FOMC has also employed measures such as purchasing U.S. Treasury bonds and agency mortgage-backed securities (MBS), aiming to alleviate pressures across the entire financial market, ensuring the smooth flow of credit and the health of the financial environment. Particularly so, during the March 2020 COVID-19 outbreak, when financial markets experienced turbulence, the Federal Reserve succeeded in stabilizing the market and alleviating liquidity constraints by expanding its asset purchase scale. Furthermore, the New York Fed emphasizes that the FOMC guides the Federal Reserve in adjusting its balance sheet size and holdings to levels appropriate for executing monetary policy efficiently under a regime with ample reserve balances.