This week marked a historic event for the Federal Reserve, the monetary institution that has seen its share of historic events since the onset of the financial crisis in 2007. The Fed's balance sheet grew to $3 trillion for the first time ever -- the largest in the Fed's nearly 100 year history.

The Fed began purchasing $85 billion per month earlier in January as part of its expanded third round of quantitative easing. Initially, the Fed had planned to purchase $45 billion per month in mortgage backed securities.

However, with the expiration of the second Operation Twist in December, the Fed rolled the purchases of treasury bonds into QE3 and began purchasing a total of $85 billion per month in securities this month.

As of Jan. 23, the Fed's balance sheet climbed by $48 billion to $3.01 trillion, according to a release from the central bank Thursday from its Washington headquarters. The announcement coincided with the S&P 500 closing at its highest level since December 2007 as the index nears the psychological 1500 level.

The recent moves by the Fed are being called the most revolutionary policy measures taken by the central bank since its inception, potentially second only to Paul Volcker in the 1970's. Volcker, the Fed Chairman from 1979 to 1987, raised interest rates as high as 22% during his tenure, to end the stagflation that plagued the era and cool inflation.

Under Bernanke, the Fed has embarked upon three rounds of quantitative easing, two rounds of Operation Twist, rate cuts, currency swap lines, and an alphabet soup of repurchase facilities aimed at stabilizing the financial system in 2008.

Under Bernanke, the Fed has had to focus less on inflation and more on deflation. The Fed's dual mandate, full employment and stable inflation, has led the Fed to adopt an informal inflation target of 2.5% PCE inflation and 6.5% unemployment.

With inflation trending below the target and unemployment stuck around 8% for months, the Fed has kept easing policy to achieve these targets.

The future of the Fed policy decisions remains shrouded in some mystery. The new FOMC members, the policy-setting committee of the Fed, took seats this month and the committee has a slightly more dovish tilt than in previous years.

Also, Chairman Bernanke, the architect of many of these crisis-fighting policies, is set to retire from his role as Chairman at the end of 2013 and no successor has been named as of yet. Leading candidates include current Fed Vice-Chairman Janet Yellen and former Treasury Secretary and Current Harvard University President Larry Summers.

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