Friday, 25 January 2013

How the Fed Balance Sheet Grew to USD 3 Trillion

For the first time in history, the Fed's balance sheet hit more than USD 3 trillion according to data released by the Fed yesterday when total assets ended the week on USD 3.013333 trillion. This compares to total assets at the beginning of 2008 of USD 925.104 billion, an increase of USD 2.088229 trillion in just over five years. The increase of the Fed's balance sheet (major items) was made up as follows:

As a result of the Fed purchasing assets in the markets on a grand scale, the U.S. monetary base also hit an all-time record high yesterday when it ended the week on USD 2.796 trillion. And the Fed, with QE3, has no plans of ending its asset purchase programs and monetary expansion (printing) just yet so expect new records to be broken in the following weeks and months unless there is a sudden change in "policy".




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