For the April 11 week, the Fed's balance sheet expanded $1.7 billion after shrinking $12.7 billion the week before. However, that was notable movement by components. Holdings of Treasuries jumped $11.7 billion while "other assets" (largely those denominated in foreign currencies) rose $3.2 billion. Largely offsetting was a $14.0 billion fall in central bank liquidity swaps.
Total assets for the April 11 week edged up to $2.869 trillion.
Reserve Bank credit for the April 11 week increased $1.0 billion, following a drop of $29.5 billion the prior period.
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.
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
The Fed began using its balance sheet to expand liquidity starting in late 2008. Quantitative easing QE1 started in late 2008 and QE2 began in late 2010 and ended in June 2011. However, the level of the Fed's assets (reflecting available liquidity) remains quite elevated.
Data Source: Haver Analytics