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Federal Reserve Balance Sheet Rises To $2.581 Trillion

Published Friday, 11th March 2011 04:45 am - © 2011 Dow Jones


By Andrew Ackerman and Jeff Bater

Of Dow Jones NEWSWIRES

WASHINGTON -(Dow Jones)- The U.S. Federal Reserve's balance sheet continued to expand last week as the central bank bought more government debt in an effort to spur economic growth.

The Fed's asset holdings in the week ended March 9 climbed to $2.581 trillion, from $2.549 trillion a week earlier, it said in a weekly report released Thursday. It was the fifth consecutive week in which assets were above $2.5 trillion.

The Fed's holdings of U.S. Treasury securities rose to $1.266 trillion on Wednesday from $1.236 trillion the previous week.

The bloated balance sheet has grown recently as the central bank expands Treasury holdings, part of a controversial effort to buy up $600 billion in government bonds through June to try and keep borrowing rates low and encourage growth.

With inflation seen staying low and unemployment high, Fed officials decided to keep in place their easy-money policies, including buying government bonds, at their first Federal Open Market Committee meeting of 2011, according to meeting minutes released three weeks ago. The bond purchases began in November.

Meanwhile, Thursday's report showed total borrowing from the Fed's discount window edged down to $20.18 billion Wednesday from $20.38 billion a week earlier. Borrowing by commercial banks rose to $12 million Wednesday from $7 million a week earlier.

Thursday's report showed U.S. government securities held in custody on behalf of foreign official accounts increased slightly to $3.398 trillion, from $3.392 trillion in the previous week.

U.S. Treasurys held in custody on behalf of foreign official accounts increased to $2.638 trillion from $2.631 trillion in the previous week.

Holdings of agency securities, meanwhile, edged down to $759.25 billion from the prior week's $761.06 billion.

Further data on the Fed's balance sheet, including a breakdown of district-by-district discount window borrowing, can be found at: http://federalreserve.gov/releases/h41/current/h41.pdf.

-By Andrew Ackerman, Dow Jones Newswires; 202-569-8390; andrew.ackerman@dowjones.com

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