“Two steps forward, two steps back”: Fed’s new song and dance, no?
Total assets on the Fed’s balance sheet for the week ended August 26, released this afternoon, fell by $20 billion, to $6.99 trillion, after two weeks in a row of increases, which had followed two weeks in a row of declines, which had followed two weeks in a row of increases, which had followed four weeks in a row of declines. Two steps forward, two steps back — the Fed’s new song and dance? With the effect that total assets are now down by $179 billion from their peak on June 10:
So here’s how that happened by the five major QE-related categories on the Fed’s balance sheet: repos, central bank liquidity swaps, special purpose vehicles (SPVs), mortgage-backed securities (MBS), and Treasury securities.....
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....Treasury securities rose by $13 billion to $4.36 trillion.
Since mid-May, the Fed has increased its Treasury holdings in a range between $6 billion and $29 billion a week, following the 10-week period, starting in mid-March, when it had gone hog-wild, buying at the peak $362 billion in the week ended April 1:
