Weekly Movements in the Federal Reserve’s Balance Sheet Remain Relatively Muted…

The total size of the Fed’s balance sheet increased by just under $5 billion over the week ending 31/8/11. Here I present the usual charts of the Federal Reserve’s assets and liabilities.

 

Federal Reserve Balance Sheet Chart - ASSETS

Assets of the Federal Reserve - Click to enlarge. Source: Federal Reserve

 

The total size of the Federal Reserve’s balance sheet increased by $4.75 billion over the week ending August 31, 2011. Surprise surprise! The majority of that increase was manifest in an increase in the Fed’s holdings of US Treasury notes & bonds and ‘Other Assets’ (meaning, unidentifiable junk). Interestingly the Fed’s holdings of Federal Agency Debt securities and Mortgage-backed securities were flat on the week, and the Maiden Lane, TALF items were also relatively flat. These holdings have been decreasing recently; perhaps this halting could suggest that the public sector’s ‘plan’ is not quite going… well… to plan. We’ll see over the coming weeks and months…

 

Federal Reserve Balance Sheet Chart - ASSETS (PROPORTIONAL)

Assets of the Federal Reserve Presented on a Proportional Basis - Click to enlarge. Source: Federal Reserve

 

As can be seen from the ‘proportional holdings’ chart shown above, the Fed’s assets have reverted back to a more ‘traditional’ stance (if one makes the admittedly brave assumption that 40 years of fiat currency constitutes ‘tradition’).

 

Federal Reserve Balance Sheet Chart - LIABILITIES

Liabilities of the Federal Reserve - Click to enlarge. Source: Federal Reserve

 

The change in the Fed’s liabilities showed a switcheroo between the US Treasury’s general account (-$19.6 billion) and the deposits held by depository institutions (+$18 billion). This is highly suspect to say the least! The net increase in the Fed’s liabilities came from an increase in the outstanding stock of Federal Reserve notes.

 

Federal Reserve Balance Sheet Chart - LIABILITIES (PROPORTIONAL)

Liabilities of the Federal Reserve Presented on a Proportional Basis - Click to enlarge. Source: Federal Reserve

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Posted Sep 11, 2011