Thursday, November 13, 2008

Federal Reserve Assets Increase $139 Billion this Week

by Calculated Risk on 11/13/2008 04:36:00 PM

Some day the Fed's balance sheet will shrink ... hopefully ... but for now the assets are increasing rapidly. The assets on the Fed's balance sheet have more than doubled from under $1 trillion at the beginning of 2008 to about $2.214 trillion now.

Dallas Fed President Richard Fisher commented last month that he expects the assets to grow to $3 trillion by the end of this year.

"I would not be surprised to see them aggregate to $3 trillion—roughly 20 percent of GDP—by the time we ring in the New Year."
Here is the Federal Reserve report released today.

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

The Federal Reserve assets increased $139 billion this week to $2.214 trillion. Note: the graph shows Total Factors Supplying Federal Reserve Funds and is an available series that is close to assets.

So far the graph shows Federal Reserve assets are still increasing rapidly. Fisher may be right - $3 trillion by the end of the year.

The good news is the Fed marked up the value of the Bear Stearns assets to $26,949 from $26,863 million last week - an increase of $86 million!