May 6, 2020

Since extreme measures to combat the spread of the corona virus were put into place in mid-March the Fed’s balance sheet has risen by $2.3 trillion from $4.3 trillion to $6.6 trillion.  Of those purchases, $1.4 trillion has been U.S. government securities, mostly Treasury notes and bonds with a few bills and a few inflation-indexed bonds thrown in.  It has purchased about $0.3 trillion of mortgages, repurchase agreements have risen by $0.2 trillion, and a bit more than $0.1 trillion in loans to money market mutual funds for liquidity.  Its loans to small businesses and to state and local governments have not yet begun to climb, The Fed’s portfolio is bound to climb to $9.0 trillion or more by summer.

Stephen Slifer

NumberNomics

Charleston, SC