Federal Reserve Balance Sheet Update: Week Of October 13
This week we have official confirmation of our speculation from last week, that the Fed is now the second largest UST holder institution after China, with $821.2 billion in Treasurys. And courtesy of yesterday's POMO schedule announcement, according to which the Fed will purchase $32 billion in UST through November 8, at which point it was have $853 billion, we now know that Brian Sack will be the biggest holder of US Treasurys in the world (surpassing China's $847 billion). Aside from this there
was little notable in the weekly balance sheet update: bank reserves
increased by $29 billion in the past week, as Primary Dealers added even more to
their purchasing capacity post the end of quarter window dressing (more in an upcoming update).
Summary balance sheet breakdown:
held outright: $2,052 billion, unchanged from the week prior.
Treasury holdings increased
from $819 billion to $821 billion, the reason for the increase being the continuing UST purchasing via QE Lite, soon to become QE2.
holdings were completely unchanged at 1.079 trillion. The treasury
purchases in the week were a catch up from the $13 billion in prepays
in the past week.
- Agency holdings declined by $2 billion to $152 billion.
borrowings: were flat at
swaps, Maiden Lane and other assets: $190
billion, an increase of $2 billion W/W. FX liquidity swaps were at $60
million which gives us (even more) concerns about the Fed's disclosure discipline, considering that the ECB disclosed yesterday that the Fed has now has lent out $560 million in FX swaps. The "value" of Maiden
Lane I was at $28.5
billion. Maiden Lane II was at $15.7 billion, Maiden Lane III at $22.8 billion while AIA Aurora was $26
- The monetary base was $1.943 trillion (more on M1 and M2 later)
- Reserve balances with banks: $1.026 trillion, an increase of $29 billion from the prior week.
- Foreign holdings of USTs and MBS at a new all time high of $3.27 trillion, an increase of $13 billion W/W.