Federal Reserve Balance Sheet Update: Week Of August 12

Tyler Durden's picture

Total Federal Reserve balance sheet assets for the week of August 12 of $1,990 billion (an increase of $13 billion from the prior week) consisting of:

  • Securities held outright: $1,373 billion
    (an increase of $107 billion MoM, resulting from $43.7 billion in new
    Treasury purchases,
    $53.8 billion increase in MBS and $9.4 billion in Agency Debt), or $18.6 billion increase sequentially
  • Net borrowings: $340.5 billion (a decline of $47 billion month over month)
  • Float, liquidity swaps, Maiden Lane and other assets: $277 billion
    (another record decrease of $83.7 billion month over month due to a continued reduction in Central Bank
    Liquidity Swaps
    ($32 billion) and ($52) billion in CPFF outstandings).The rate of decline sequentially has, however, slowed dramatically and was just $5.6 billion lower than the prior week (after a $37.7 billion reduction in the prior week). It appears the Fed has reached the threshold in removing Swap and CPFF liquidity.
  • Foreign
    central
    bank liquidity swaps have hit another lowest level since the Lehman
    bankruptcy ($76.2 billion), athough the rate of sequential decline has slowed to a crawl. We would not be surprised if next week the Fed indicated more liquidity was being pumped into CB Swaps.

Foreign
holdings
of US Securities decreased for the first time in 5 months by $299 million sequentially (weekly) to
$2,809.9 billion from $2,810.2 billion in the prior month. Keep in mind in the same time period the Fed purchased over $16.6 billion of Treasuries, indicating that in the last week the Fed was the only purchaser of Treasuries. In a normal environment this would be a very troubling development.

And to underscore that deflation still rules, The Federal Reserve's Monetary Base number of $1,643 billion was a decline of $31 billion MoM. Additionally Deposit Reserves were at $772.6 billion, a $33.2 billion decline MoM (hopefully this simply means that some banks have finally resorted to pushing excess reserves out of the basement and out the door).