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Federal Reserve Watch: Federal Government Dispersing Money

Apr. 09, 2021 1:07 PM ET4 Comments
John M. Mason profile picture
John M. Mason


  • The Federal Reserve continues to buy securities and now the U.S. Treasury Department is succeeding in getting its monies out to the private sector.
  • In other words, more and more money is getting into the private sector as bank reserve balances, a proxy for excess reserves, increased by almost $275 billion this banking week.
  • In fact since the banking week ending February 3, reserve balances have increased $740 billion, almost 80 percent of the total assets of the Fed just before the Great Recession.
  • Chairman Powell is erring on the side of monetary ease, something he wants to do, and seems intent upon maintaining this approach as the economy pulls out of the recession.

fed trader draws market price on touchscreen
Photo by 8vFanI/iStock via Getty Images

Since February 3, 2021, the Federal Reserve has overseen the reserve balances held by commercial banks rise by over $740.0 billion.

Note, that this total is roughly 80 percent of what the total assets

This article was written by

John M. Mason profile picture
John M. Mason writes on current monetary and financial events. He is the founder and CEO of New Finance, LLC. Dr. Mason has been President and CEO of two publicly traded financial institutions and the executive vice president and CFO of a third. He has also served as a special assistant to the secretary of the Department of Housing and Urban Development in Washington, D. C. and as a senior economist within the Federal Reserve System. He formerly was on the faculty of the Finance Department, Wharton School, the University of Pennsylvania and was a professor at Penn State University and taught in both the Management Division and the Engineering Division. Dr. Mason has served on the boards of venture capital funds and other private equity funds. He has worked with young entrepreneurs, especially within the urban environment, starting or running companies primarily connected with Information Technology.

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Comments (4)

terryongarland profile picture
We are breaking new ground on the "road to utopia",and it appears all are guessing on the impacts of digital funding of the economy. It will be wonderful..or it will all blow up..who knows. Those of us who have been around the block a few times are uncertain and skeptical. It creates an uncomfortable tension of uncertainty beyond the norm..whatever that is. So..troubling things like critical thinking be damned..party on for a bit.
@terryongarland , Critical thinking be damned? "Damn the torpedoes! Full speed ahead!"
Biden and the Dems have indicated they might drop any tax increases to get the Republicans to support the infrastructure bill.
Thank you. We need big picture info and commentary. As always, I appreciate your thoughtfulness. Timing.
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