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Comment: Fed’s holdings of securities rise at a slower pace as of Wednesday, May 6

The weekly average holdings of securities by the Federal Reserve rose more slowly in the data as of May 6. Holdings of US Treasurys, Agencys, and Agency MBS were up $43.0 billion from the prior week, the smallest increase since $38.0 in the March 18 week. The total is now a record $5.606 trillion and climbing.

Holdings of US Treasury bills were unchanged at $326.0 billion. Holdings of notes and bonds were up $53.0 billion to $3.672 trillion. Agency holdings were unchanged at $2.3 billion while Agency MBS holdings were down $10.0 billion to $1.605 trillion. While the Fed is continuing to purchase MBS, maturing and prepaid mortgages can cause the total to decline as transactions clear.

The crossing of the month-end period was probably the reason for the $9.4 billion increase in repurchase operations. The level of $172.9 billion wasn’t much different from the prior two weeks and suggests that conditions are closer to normal, if still some distance away. Discount window borrowing was down $1.3 billion to $29.9 billion and in line with recent weeks. Central bank swap lines remained in use with the total rising $10.7 billion to $445.0 billion in the May 6 week.

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