Econoday Economic Report: Fed Balance Sheet August 18, 2011

2011 Economic Calendar

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Fed Balance Sheet

Released On 8/18/2011 4:30:00 PM For wk8/17, 2011

	Prior	Actual
Total Assets - Weekly Change	$5.2 B	$-14.5 B
Reserve Bank credit - Weekly Change	$5.2 B	$-6.5 B

Highlights
The Fed has its work cut out for it in order to hold the balance sheet steady as pay down on certain assets is showing up. For the August 17 week, the Fed's total assets shrank $14.5 billion after gaining $5.2 billion the period before. Treasuries holdings actually grew $2.9 billion after rising $3.8 billion. But in the latest period, mortgage-backed securities fell $4.7 billion and federal agency debt declined $1.8 billion. Also, net portfolio holds of Maiden Lane LLC fell $2.6 billion. Total assets for the August 17 week came in at $2.862 trillion.

Reserve Bank credit for the August 17 week fell $6.5 billion after expanding $5.2 billion the prior week.

Note: Total assets in the Fed's H.4.1 report are Wednesday levels while Reserve Bank credit is an average of daily figures for the week ending on the same Wednesday. Changes in total assets are from Wednesday to Wednesday while changes in Reserve Bank credit are for weekly averages.

Definition
The Fed's balance sheet is a report showing factors supplying reserves into the banking system and factors absorbing (using) reserve funds. Essentially, the balance sheet shows the various Fed programs for injecting liquidity into the economy and how much the Fed has used each for adding or withdrawing reserves. This report is called Factors Affecting Reserve Balances - or the "H.4.1" report using Fed jargon. Why Investors Care