Fed’s QE-Infinity, announced about 3 weeks ago, is meant for the Fed to purchase US$40 billion of mortgage-backed securities per month.
The New York Fed has increased its pace of purchase of mortgage-backed securities after the announcement. Remarkably, however, the total holding of mortgage-backed securities on Federal Reserve’s balance sheet is now even smaller than before QE-Infinity was announced. Similarly, the total size of Federal Reserve balance sheet (as per factors affecting reserve balances account) is also no greater than before the announcement of QE-Infinity.
It may be too early to make any conclusions from this observation. However, we find this rather interesting.
Photo: Also Sprach Analyst
Source: Federal Reserve
This article originally appeared here: Federal Reserve’s balance sheet is not expanding (yet)
Also sprach Analyst – World & China Economy, Global Finance, Real Estate
Read more posts on Also Sprach Analyst »