MNI POLICY: Fed Balance Sheet +$60B to Record $7.1T

By Evan Ryser

     WASHINGTON (MNI) - The Fed's balance sheet grew USD60 billion to a record

USD7.097 trillion, with slower growth this week a mix of growing Treasury

purchases and modest use of emergency programs. 

     Balance sheet growth in the week through May 27 was driven by Treasury

securities gaining USD20 billion to a record USD4.11 trillion. 

     The Fed's balance sheet is still up 67% from USD4.24 trillion in early

March, when it stepped in to unclog trading in markets that was freezing up even

for bedrock Treasuries. The Fed has slashed interest rates to near-zero,

restarted unlimited bond purchases and rolled out unprecedented emergency

programs to keep liquidity and credit flowing. 

     The Fed announced 11 emergency facilities in March and April promising to

make more than USD2.6 trillion available. According to the Fed's weekly snapshot

released Thursday, the balance sheet has shown modest utilization of 13(3)

facilities. 

     Of the five emergency facilities that are currently operating, usage stands

at USD96 billion or less than 4% of the funds available. There was USD3 billion

in ETF purchases since its corporate credit facility opened May 12 and USD49

billion for the paycheck protection program facility. 

--MNI Washington Bureau; +1 202 371 2121; email: evan.ryser@marketnews.com

[TOPICS: MMUFE$,M$U$$$,MK$$$$,M$$CR$,M$$FI$]