Looking at the Federal Reserve balance sheet over the past month it appears as if there is really nothing new to announce. The Fed continues to buy securities to hold outright in its portfolio.
The Fed added $58.9 billion in U. S. Treasury securities to its portfolio between September 2 and September 30. During this time the Fed also added $33.6 billion in mortgage-backed securities.
Overall , however, Reserve Balances with Federal Reserve Banks, the proxy for excess reserves in the banking system dropped by $107.4 billion to rest at $2,743.23 billion on September 30. That is the U. S. banking system held a little more than $2.7 trillion in excess reserves at the end of September.
The reason for the decline in reserves was primarily related to a $129.9 billion increase in the Treasury’s General Account at the Fed. On September 30d, the U. S. Treasury held almost $1.8 trillion in its primary account, the account that it collects taxes in and from which it writes checks.
In addition, the public added to its holdings of cash during this time of $10.7 billion.
Over the past four banking weeks the effective federal funds rate has remained almost constant at a 0.09 percent level.
Everything in the banking system and the financial markets seem calm and collected.
Since The End Of May
The next division of time I take is between the banking week ending May 27, 2020 and the banking week ending September 30, 2020.
The reason for the selection of the earlier week is that central bank liquidity swaps peaked in that week. On May 27, Central Bank Liquidity Swaps peaked out at $448.9 billion.
One of the major actions the Fed took in March was to help out the world financial system by opening up its window