The Fed’s average holdings of US Treasurys, Agencys, and Agency MBS reached nearly $5.2 trillion in the week ended Wednesday, April 15. Purchases of Treasury notes and bonds were up $206.3 billion to nearly $3.4 trillion and Agency MBS was up $17.5 billion to a little below $1.5 trillion. Overall the balance sheet holdings were up $223.8 billion week-over-week.
The proportion of holdings of Treasurys relative to Agencys and MBS rose to 72% in the week, while buys of Treasurys outpace the Agency debt.
Now that the calendar has crossed the end of month and quarter on March 31, use of repo and reserve repo facilities has declined. Central banks’ sue of swap lines rose slightly in the week, but it appears that the need for dollar funding is being met and the use of swap lines is leveling off. Federal agencies have encouraged those eligible to borrow at the discount window to do so if needed, and even if not needed to reduce the stigma of having to turn to the lender of last resort. Financial institutions are doing so.
Disclaimer: Whetstone Analysis provides commentary as a service to its subscribers. Whetstone Analysis is not responsible for, and expressly disclaims all liability for, damages of any kind arising out of use, reference to, or reliance on any information contained within the site. While the information contained within the site is periodically updated and every effort is made to ensure its accuracy, no guarantee is given that the information provided in this Web site is correct, complete, and up-to-date. Click here to read our full Disclaimer.