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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
FED
Fed assets grew by $103.9B in the week to Jul 14, with MBS making up the bulk ($82.7) of the purchases and Treasuries ($19.8B incl TIPS) virtually all of the rest. Liquidity facilities and 13-3 emergency facilities dipped slightly.
- The Fed's balance sheet eclipsed $8 trillion in mid-June and are on pace to grow to nearly $9T by year-end (absent a much swifter-than-expected taper).
- When asked at this week's Congressional hearings when and if if the Fed's balance sheet would again drop below $8 trillion, Powell responded: "we have not made those decisions yet, but it is a reasonable starting point to think that we might hold the balance sheet constant for some time and then perhaps allow it to shrink under $8 trillion."
Includes end-2021 projections on current pace. Source: Federal Reserve
- Powell pointed to the last decade's playbook: the Fed stopped large-scale asset purchases in October 2014, but held the portfolio size constant by reinvesting maturing securities. In Oct 2017 they stopped reinvestment and assets began gradually shrinking..
- On the current trajectory - with tapering starting and ending by end-2022, that suggests a 2025 start to asset rolloff. That conversation for the FOMC is likely to be far off in the future through.
| Assets | Total | Nominal Tsys | TIPS | Bills | MBS+Agencies | 13-3 Facilities | Liquidity Facilities | Other* |
| Last Week's Net Change (USDbn) | 103.9 | 17.8 | 2.0 | - | 82.7 | - 4.9 | - 1.4 | |
| 4-Week Net Change (USD bn) | 137.4 | 57.4 | 7.6 | - | 74.2 | - 3.1 | 0.6 | |
| Total Holdings (USD bn) | 8,201.7 | 4,484.8 | 354.9 | 326.0 | 2,404.7 | 140.0 | 89.0 | 402.3 |
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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