Keeping you up to date on the latest data releases.
- Federal Reserve Balance Sheet
There was little change in the asset side of the balance sheet this week. At the end of March, the Large Scale Asset Purchase programs expired and most potential inflows into the balance have now passed. There is still room for mild growth as some of the final purchases are processed and cleared. All lending to financial institutions and credit markets declined only slightly throughout the week. Most changes in the balance sheet this week occurred as the composition of the liabilities shifted. Notably, excess reserves retreated by almost $50 billion. This drop can be attributed to two dramatic increases in Treasury accounts. The Treasury’s general account at the Fed, which could be expanding with the receipt of tax payments, grew by about $30 billion. The other jump occurred in the Treasury’s Supplemental Financing Program (SFP) account, as the final $25 billion auction of SFP Treasury securities was recorded. As the debate on how to exit from the Fed’s balance sheet expansion heats up, these Treasury accounts may be an unpredictable but helpful source of reserve draining.