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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
From our latest Fed Balance Sheet tracker out earlier today:
- Last week’s Federal Reserve H.4.1 release (delayed a day to Friday due to Thanksgiving) showed assets were little changed in the most recent week, with the SOMA portfolio just $3.3bln lower; the 4-week change in SOMA is $73bln, with Treasuries/Bills making up almost $71bln of that total.
- With the SOMA portfolio down $1.2T under the QT program started in mid-2022, that’s around 27% of pandemic QE (from Mar 2020) reversed.
- Including the legacy 13-3 Pandemic programs (current size $27bln), the total takeup of Fed emergency liquidity/lending facilities has now fallen to $177bln vs the recent peak close to $450bln in March 2023 amid the SVB/First Republic banking turmoil. Bank Term Funding Program (BTFP) takeup rose by $1.2bln in the most recent week, bringing it up to $114.1bln, a $5bln rise in the past week.
- The overall trajectory of liquidity extension to banks remains to the downside, however. The past month has seen a decline of $0.7bln in Discount Window takeup, in addition to $14.4bln lower “other credit extensions” (temporary lending for the FDIC), vs a 2023 peak of $228bln.
- In other words, between QT running in the background, and a fairly limited rise in BTFP offset by declines elsewhere, the asset side of the Fed's balance sheet is steadily declining.
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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