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Showing posts from April, 2018

Quarterly Report on Federal Reserve Balance Sheet: Fed Diet Starts

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Recently, the Federal Reserve released the March 2018 edition of the Quarterly Report on Federal Reserve Balance Sheet Developments a document that provides updates on the changes in assets and liabilities of the central bank and how they coexist with the changes in interest rate policy. With the FOMC announcing an interest rate increase at the first meeting led by the new chairman, Jerome Powell, some changes in open market operations are expected to be the result.
The February 28th, 2018 balance sheet was released at the end of March 28th and showed the result of the Federal Reserves first attempt at shrinking the balance sheet.

ItemChange (in billions)PercentTotal Assets-$68-1.5%U.S. Treasury securities-$41-1.7%mortgage-backed securities-$11-0.6%
The table above shows the two areas the Federal Reserve drew from (both included in the total asset draw). U.S. Treasuries were understandably the largest decrease on the asset side with an almost 2 percent decrease. Mortgage-backed securi…