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Total Federal Reserve balance sheet assets for the week of July 29 of $2,011 billion consisting of:

  • Securities held outright: $1,343 billion (an increase of $125 billion MoM, resulting from $47.5 billion in new Treasury purchases and a $77.4 billion increase in Fed Agency Debt - this is the most rapid increase in monthly MBS purchases since March)
  • Net borrowings: $347 billion (a decline of $57 billion month over month)
  • Float, liquidity swaps, Maiden Lane and other assets: $320 billion (decrease of $49 billion month over month due to a continued reduction in Central Bank Liquidity Swaps ($28 billion) and $25 billion in CPFF outstandings).
  • Foreign central bank liquidity swaps are notable as they are at the lowest level since the Lehman bankruptcy ($88 billion), and presumably a good indicator on future dollar value manipulation capacity by the Fed. The rate of decline over the past week was the lowest since the metric commenced declining, and has been correlating closely with a declining dollar: this implies the Federal Reserve's toolkit to implicitly weaken the dollar is running out of options as the Liquidity Swap gets closer to zero.

Foreign holdings of USTs and Agencies increased by a meager $27.4 billion monthly to $2,793 billion from $2,766 billion in the prior month. This is roughly 20% of the comparable increase in Securities Held Outright by the Federal Reserve.

The Federal Reserve's Monetary Base was at $1,663 billion, indicating the flat/declining trend YTD (click to enlarge).

Source: Federal Reserve Balance Sheet: Week of July 29