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

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 billion, 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.