MNI POLICY: Fed's Balance Sheet Assets -USD20B to USD6.99T

The Fed's balance sheet shrank USD20 billion over the past week to USD6.99 trillion led by mortgage-backed securities, data released Thursday showed.

Mortgage-backed securities fell USD29 billion to USD1.95 trillion as of Aug. 26. Currency swaps with foreign central banks also continued to roll off the Fed's portfolio, down USD4 billion to USD92 billion.

The overall decline was somewhat offset by USD13 billion in purchases of Treasuries to a record USD4.36 trillion. Balance sheet assets remain close to the record USD7.17 trillion set in early June.

The Fed's other emergency facilities aimed at supporting 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. Earlier Thursday, Fed Chair Jerome Powell tilted long-term policy goals to more stimulus by targeting average inflation and any gap below full employment, while also saying policy makers will give more weight to financial stability concerns.

The Main Street Lending Program nearly doubled again for the second straight week reaching to a total of USD855 million from USD472 million the week before. Main Street's growth again eclipsed the pace seen by the Fed's secondary market corporate credit program that grew this week by USD119 million to a total of USD12.6 billion as daily corporate bond purchase averages picked up from weeks prior.