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Comment: Week Fed balance sheet assets start to climb as of Wednesday, March 18

The Fed’s H4.1 weekly report on its balance sheet shows the first effects of the start of large scale asset purchases, injections of liquidity via repo operations, and encouraging eligible institutions to borrow from the discount window.

Total holdings of securities was up $38.0 billion with Treasury bills up $6.4 billion, Treasury notes and bonds up $33.9 billion, MBS down $1.4 billion, and Agencys unchanged.

Repo operations on the balance sheet were up $189.5 billion, nearly double the amount in the week before. Discount loans were up $6.7 billion in response to their liquidity needs and in cooperation with federal banking agencies.

Central bank swap lines were made cheaper to use and extended to more central banks as of March 15 and 19. However, these lines haven’t seen an upswing in use — yet. It is more common for these to see more activity at quarter- and year-end. March 31 is only a couple weeks away and should see some action then.

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