Fed Watch: Balance Sheet sets record 2.3 Trillion

Fed Balance Sheet (See http://bit.ly/bmBwxn):

The Federal Reserve is largest hedge fund ever with over half of its assets in Risky MBS securities, yes those same assets which caused over 100 banks to fail last year.

You should be very concerned.  This could end very ugly.
  • Reserve bank credit outstanding (the size of the Fed’s balance sheet) rose by $5.4 billion in the week ending March 24th to a new record $2.30 trillion.
  • Securities held outright increased $7.4 billion (all in agency MBS).
  • The Fed will purchase the final $5 billion of Agency MBS next week, taking the program to $1.25 trillion (though $171 billion of these purchases have yet to settle, so the Fed’s balance sheet shows only $1.07 billion Agency MBS).
  • Securities held outright are now 88% of the Fed credit outstanding. Discount window loans fell $2.4 billion to $9.0 billion (0.4% of the Fed’s balance sheet).
Source RDQ

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