Keeping you up to date on the latest data releases.
A couple of things have occurred over the past two weeks that have impacted the Fed’s balance sheet. First, there are more signs that the situation in Ireland may be straining the European financial system, as the European Central Bank drew an extra $5 million in dollar liquidity on their currency swap line this week, bumping their drawing to $65 million. The terms were similar to recent draws, 6 days at a rate of 1.19 percent. The amount drawn may rise in upcoming weeks as the Irish government works with a number of agencies to discuss the possibility of a bailout.
Second, Treasury holdings in the System Open-Market Account jumped by over $28 billion in the past two weeks, as the first purchases for the Federal Reserve’s intermediate-term Treasury purchase program have gotten under way. These purchases are being made jointly with the Treasury reinvestment program announced in August. The reinvestment strategy had held the holdings relatively stable through the beginning of November, and the new round of Treasury purchases has started to inch the portfolio upward. On another note, Maiden Lane made its scheduled monthly repayment, lowering its outstanding balance to just under $26 billion.