Thursday, March 18, 2010

Countdown: Fed MBS Purchase Program 99.2% Complete

by Bill McBride on 3/18/2010 05:34:00 PM

Almost finished ...

For a discussion on how trades settle, and the coming associated expansion of the Fed's balance sheet over the next few months, please see my post last week.

From the Atlanta Fed weekly Financial Highlights released today (as of last week):

Fed Balance SheetClick on graph for larger image in new window.

Graph Source: Altanta Fed.

This graph shows the cumulative MBS purchases by week. From the Atlanta Fed:

  • The Fed purchased a net total of $10 billion of agency-backed MBS through the week of March 10. This purchase brings its total purchases up to $1.23 trillion, and by the end of the first quarter 2010 the Fed will have purchased $1.25 trillion (thus, it is 98% complete).
  • The NY Fed purchased an additional net $10 billion in MBS for the week ending March 17th. This puts the total purchases at $1.240 trillion or 99.2% complete. Just $10 billion and two more weeks to go - and I don't expect any fireworks ...

    Note: The Fed's balance sheet released today shows "only" $1.066 trillion in MBS on March 17th. As mentioned above, the difference is the NY Fed announces the purchases when they contract to buy; the Federal Reserve places the MBS on the balance sheet when the contract settles.