MNI POLICY: Fed Assets +$53B to $7.01T; Main Street Grows

The Fed's balance sheet jumped in size over the past week, data released Thursday showed, as the central Main Street program saw its quickest growth to date.

The central bank's balance sheet grew by USD53 billion to USD7.01 trillion as of Aug. 19, with growth driven by Treasury and mortgage-backed securities purchases. Treasury securities grew USD25 billion to USD4.3 trillion as MBS jumped by USD44 billion to just shy of USD2 trillion.

This was slightly offset by foreign currency swaps with foreign central banks that continued to roll off the Fed's portfolio by USD4 billion to USD95 billion.

The Main Street Lending Program doubled to a total of USD472 million from USD226 million the week before. It was the first time the Main Street program eclipsed the pace of growth seen by the Fed's corporate credit program that grew this week by USD63 million.

The central bank's other facilities aimed at steadying market conditions continued to decline or level off after early surges in March when the Fed announced programs and cut interest rates to near-zero.

Fed officials note the small volume of borrowing in recent months at the facilities reflect "improved availability of funding from market sources" but that the "ongoing provision of backstop credit in various forms continued to be important to sustain the market improvements already achieved," minutes from the July meeting said this week.