Although the Fed continues to do nothing with the housing paper from Fannie and Freddie the treasury portfolio showed its biggest decrease since QT began. From the most recent Form H.4.1 the two gigantic line items affected by QT:
H.4.1
5. Consolidated Statement of Condition of All Federal Reserve Banks
Millions of dollars
|
Assets, liabilities, and capital |
Eliminations from consolidation |
Wednesday |
Change since |
|
|
Wednesday |
Wednesday |
|||
|
Sep 28, 2022 |
Oct 6, 2021 |
|||
|
Assets |
|
|
|
|
|
Gold certificate account |
|
11,037 |
0 |
0 |
|
Special drawing rights certificate account |
|
5,200 |
0 |
0 |
|
Coin |
|
1,216 |
- 6 |
+ 8 |
|
Securities, unamortized premiums and discounts, repurchase agreements, and loans |
|
8,652,633 |
- 37,735 |
+ 309,216 |
|
Securities held outright1 |
|
8,334,431 |
- 37,922 |
+ 388,058 |
|
U.S. Treasury securities |
|
5,633,926 |
- 37,922 |
+ 184,649 |
|
Bills2 |
|
308,699 |
- 4,035 |
- 17,345 |
|
Notes and bonds, nominal2 |
|
4,849,432 |
- 33,856 |
+ 157,464 |
|
Notes and bonds, inflation-indexed2 |
|
375,761 |
0 |
+ 9,320 |
|
Inflation compensation3 |
|
100,034 |
- 31 |
+ 35,210 |
|
Federal agency debt securities2 |
|
2,347 |
0 |
0 |
|
Mortgage-backed securities4 |
|
2,698,158 |
0 |
+ 203,409 |
|
| ||||
....MUCH MORE
From the Federal Reserve Bank of St. Louis' FRED database the graphic presentation of the total assets side of the balance sheet (mouseover interactive, QT began on June 1 with total assets at $8.915 trillion, not at the April 13 high point $8.965 trillion)
Finally, a quick note on reverse repo's. When the Fed does a repo operation they buy securities from their counterparties and thus inject cash into the system.
When they do a reverse repo they pull cash (and thus liquidity) out of the system. The counterparties love, absolutely love this action.
Yesterday's operations paid the counterparties 3.05% (annualized rate) for the shortest term, lowest risk place to stash cash available anywhere in the world. From the Federal Reserve Bank of New York:
| Operation Type |
|---|
| Reverse Repo |
| Security Type | AMOUNT ($Billions) | RATE (%) | ||
|---|---|---|---|---|
| Submitted | Accepted | Offering | Award3 | |
| Treasury | 2,232.801 | 2,232.801 | 3.05 | 3.05 |
| Operation Date: | Thursday, October 06, 2022 |
| Settlement Date: | Thursday, October 06, 2022 |
| Maturity Date: | Friday, October 07, 2022 |
| Operation Method: | Fixed Rate |
| Settlement: | Same Day |
| Term: | Overnight |
| Term - Calendar Days: | 1 |
| Release Time: | 12:45 PM |
| Close Time: | 01:15 PM |
| Participating Counterparties: | 101 |
| Accepted Counterparties: | 101 |
