Federal Reserve Balance Sheet Update: Week Of January 21 - $2.3 Trillion - Rolling Record Highs

Tyler Durden's picture

This is it - we have gotten to the stage where every week we expect the Fed's balance sheet to reach new record highs. As the Fed has practically rolled off its emergency liquidity measures (foreign FX swaps are practically zero this week), the only variable on the margin will be direct securities holdings... and those are going to continue growing for at least 3 more months, and likely much longer. Look for the Fed's balance sheet to be at least $2.5 trillion by mid March.

Week of January 21 Detail:

Total Federal Reserve balance sheet assets for the week of January 21 just hit a brand new record high of $2,270 billion ($44
billion higher compared to the prior week's $2,226 billion). Fed assets consisted of:

  • Securities
    held outright: $1,906 billion (an increase of $50 billion MoM, all of it resulting from a change in MBS with agencies and, of course, treasuries, flat),
    or a $66 billion increase sequentially.
  • Net borrowings: $165 billion, a decline of $1.5 billion from the past fortnight.
  • Float,
    liquidity swaps, Maiden Lane and other assets: $200
    inline with the prior week, based on a $200 million reduction in CPFF and a $7
    billion reduction in FX liquidity swaps,
    bringing these practically zero ($1.3 billion) - meaning if foreign CBs find themselves with a net dollar shortage again, and even more so if there is a short squeeze in the dollar, the shit will once again hit the fan. AIA Aurora and ALICO Holdings was at $25 billion. "Other assets" keeps increasing, and have hit a record of $97 billion.  We are not sure what "other assets" represents.

Foreign holdings were at $2,945 billion, yet another decline from the prior week, this time for $5 billion.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Mr Lennon Hendrix's picture

Wall of liquidity; not the first time Manhattan needed to build a wall.

MyKillK's picture

Not that I don't believe it, but what is the rationale for claiming that the Fed will continue increasing its holdings into March?

Just the continuation of the MBS purchasing program, or something else too?

ghostfaceinvestah's picture

the MBS purchases go into March (at least), but they won't take delivery of all the MBS right away, so some will continue to hit their balance sheet for a couple months after.

Charles Mackay's picture

The Fed itself says:

"The Desk is expected to execute purchases of about $175 billion in housing-related agency debt and about $1.25 trillion of agency MBS by the end of the first quarter of 2010."

That leaves about $300 billion yet to settle in the next three months.

Anonymous's picture

"Rolling Record Highs"...that's like a Win Streak right?

Astute Investor's picture

Can I buy a call option on the Fed balance sheet?  Maybe a $2.5 trillion strike....

Anonymous's picture

sorry but only goldman sachs is allowed to make
easy money.

bc0203's picture

I look at that wall of red (a.k.a. bloodletting with MBS) and think two things:

  • the taxpayer will see 40 cents on the dollar, if we're lucky
  • that sea of red will continue to grow, probably well into 2012, until all the resets have had a chance to hit the fan
glenlloyd's picture

yep...and to think the whole mess of it isn't likely worth the dime in my pocket, which in itself isn't worth a dime either.  A massive pile of nothing.

Anonymous's picture


Anonymous's picture

Buy it, start digging for it.

Anonymous's picture

On a short timeline the survival rate of every fiat currency drops to zero.
(short time line relative to gold currency's time line)

rocky89's picture

staffers omega speedmaster watches staffers for suggestions. Their insider tips can rolex watches for women can help you find the ideal chill-out gucci rings chill-out location.Zone out in an adult-only enclave: ?? ?????? enclave: More and more ships these gucci watches these days are discreetly separating under-18s from watches gucci from their parents in order to maximize gucci replica sunglasses maximize peaceful coexistence of all concerned. The tag formula 1 watch The Sanctuary on Princess ships, The Retreat zenith watches Retreat on P&O Cruises' vessels and Carnival's franck muller watches Carnival's Serenity deck areas are places to watches chopard to grab drinks and sun loungers for gucci mens bag for blissful kid-free afternoons. You won't be ????????? be able to get away entirely from ?????? ??? from fellow frazzled parents -- these spots ???? ?? spots do tend to fill up -- tag monaco -- but you can certainly avoid chit-chat louis vuitton denim bag chit-chat by