Thursday, April 23, 2009

Federal Reserve Assets Continue to Increase

by Bill McBride on 4/23/2009 04:40:00 PM

The Federal Reserve released the Factors Affecting Reserve Balances today. Total assets increased to $2.2 trillion.

The Term Asset-Backed Securities Loan Facility (TALF) is off to a slow start, with just under $6.4 billion in assets.

Federal Reserve Assets
Click on graph for larger image in new window.

After spiking last year to $2.31 trillion the week of Dec 18th, the Federal Reserve assets then declined somewhat. Now the Federal Reserve is starting to expand their balance sheet again.

Three trillion here we come!

Note: the graph shows Total Factors Supplying Federal Reserve Funds and is an available series that is close to assets.

Most of the increase this week in factors supplying reserve funds came from the Fed buying MBS (increased by $75 billion). This is still pushing down mortgage rates: see Freddie Mac: Long-term rates Now Lower than Short-term

Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 4.80 percent with an average 0.7 point for the week ending April 23, 2009, down from last week when it averaged 4.82 percent. Last year at this time, the 30-year FRM averaged 6.03 percent.