Keeping you up to date on the latest data releases.
- Federal Reserve Balance Sheet
December’s news was dominated by the dollar liquidity swap lines extended to foreign central banks. At the end of November, the Fed announced that the swap operations would be made available to foreign banks at a lower interest rate. Throughout December, the balance of swap operations outstanding expanded from $2 billion to nearly $100 billion. The largest user was the European Central Bank, which drew $85 billion, but operations were also conducted with the Bank of Japan and the Swiss National Bank. Closing out the year, the balance owed to the Fed by the three Maiden Lane vehicles fell under $20 billion, down from $52 billion at the beginning of 2011. Regarding Operation Twist, the New York Fed announced in the last week of December that they would purchase and sell approximately $45 billion of Treasury securities during the month of January. The mortgage-backed securities (MBS) reinvestment strategy has also continued as planned, with purchases of MBS starting to settle on the books of the Fed. Typical year-end increases were noticeable in the balance of Treasury deposits at reserve banks, which spiked from $21.5 billion to $112.4 billion.