MNI POLICY: Fed Balance Sheet +$67.9B to Record $7.17T

By Evan Ryser

     WASHINGTON (MNI) - The Fed's balance sheet added USD67.9 billion to a

record USD7.165 trillion this week, as growth slowed from Treasury purchases and

borrowers made modest use of emergency lending facilities.

     Balance sheet growth in the week ended Wednesday was driven by Treasury

securities gaining USD25 billion to a record USD4.13 trillion, and repos up

USD30 billion to USD211 billion. 

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

March. 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's purchases of corporate bond exchange-traded funds rose USD1.3

billion to USD4.3 billion. It has yet to purchase individual corporate bond

issuances.

     The Fed's newest facility to become operational, the municipal liquidity

program, made its first loan to the state of Illinois in the amount of USD1.2

billion this week.

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