Fed balance sheet hits another record size

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Fed balance sheet hits another record size

Post by ToddS on Thu Jun 23, 2011 9:40 pm

Fed balance sheet hits another record size

By Emily Flitter | Reuters – 4 hrs ago

NEW YORK (Reuters) - The Federal Reserve's balance sheet expanded to a record size in the latest week, as the central bank bought more bonds in an effort to support the economy, Fed data released on Thursday showed.

The purchase was part of its $600 billion program, dubbed QE2, aimed at stimulating investment and economic activity.

The balance sheet -- a broad gauge of Fed lending to the financial system -- swelled to $2.841 trillion in the week ended June 22 from $2.811 trillion the prior week.

The central bank's holding of U.S. government securities grew to $1.602 trillion on Wednesday from last week's $1.576 trillion total.

The central bank has said it will complete QE2 at the end of June, but will continue to reinvest proceeds from agency bonds and mortgage-backed securities as they mature.

The Fed's ownership of mortgage bonds guaranteed by Fannie Mae, Freddie Mac and the Government National Mortgage Association (Ginnie Mae) eased to $914.33 billion from $914.51 billion the previous week.

The Fed's holdings of debt issued by Fannie Mae, Freddie Mac and the Federal Home Loan Bank were steady at $118.37 billion.

The Fed's overnight direct loans to credit-worthy banks via its discount window averaged $20 million a day in the week ended Wednesday, compared with an average daily rate of $24 million last week.

(Reporting by Emily Flitter; Editing by Chizu Nomiyama)

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