Keeping you up to date on the latest data releases.
The biggest balance sheet news in the month of September was the Federal Open Market Committee’s (FOMC) statement following this month’s policy meeting. Over the next nine months, the Fed is expected to sell $400 billion of short-term (1- to 3-year) Treasury securities and use the proceeds to purchase an equivalent amount of longer-term (7- to 30-year) Treasury securities. The FOMC also agreed to take the incoming principal payments from its holdings of agency debt and mortgage backed securities (MBS), which had previously been reinvested in Treasury securities, and reinvest the funds in more agency MBS. The first set of new agency MBS purchases occurred in the first week of October, amounting to nearly $4 billion. Early in September, an announcement out of Europe suggested that the European Central Bank (ECB) would begin to take advantage of the dollar liquidity swap line that it has established with the Fed. Since the announcement, the ECB has withdrawn no less than $500 million each week to provide dollar liquidity to European banks. Also, preparatory Term Deposit auctions have continued, with the most recent auction drawing just over $5 billion. Each of the Maiden Lane vehicles made payments on its outstanding loans during the month, and Maiden Lane I’s payment was a fairly significant $3 billion.