MNI POLICY: Fed's Balance Sheet Assets +$27B to $7.02T

The Fed's balance sheet grew USD27 billion over the past week to USD7.02 trillion led by Treasury securities, data released Thursday showed.

Holdings of Treasuries increased USD28 billion to a record USD4.39 trillion, while holdings of mortgage-backed securities were flat at USD1.95 trillion as of Sept. 2.

Currency swaps with foreign central banks continued to roll off the Fed's portfolio, down USD3 billion to USD89 billion.

Total balance sheet assets peaked at a record USD7.17 trillion in early June but has since leveled off, remaining steady near USD7 trillion. The Fed's total portfolio is up 65% since early March at 36% of U.S. GDP.

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. Fed officials in the last week have said QE must transition from stabilizing markets to sustaining the economy during the pandemic, though markets already are in line with policy makers' view that loose policy will be in place for a while.

The Main Street Lending Program was up USD317 million over the last week to a total USD1.2 billion. Earlier this week Treasury Secretary Steven Mnuchin told Congress that his agency estimated the Main Street Lending Program could see a total of USD25-USD50 billion in loans.