Mystery Of The Increasing Fed Balance Sheet – RISES By $705 Million (A Hardy Boys Novel)

by Anthony B Sanders
The Federal Reserve of New York just released their weekly System Open Market Account Holdings report. The Federal Reserve Balance Sheet actually grew by $705 million (rather than shrink as Janet Yellen indicated a few months ago).
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What is The Fed shrinking? That is the mystery worthy of the Hardy Boys.
 
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It turns out that The Fed didn’t shrink Treasury Notes and Bonds or Floating Rate Notes or TIPs or Federal Agency Securities. They DID increase Agency MBS holdings by $705 million.
This is now several weeks since The Fed actually sold assets off its balance sheet and the 10 year skyrocket!!
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The Fed had better tread carefully in terms of further rate increases and balance sheet unwinding. Otherwise, the Hardy Boys will have to be called to solve another mystery!
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