Econoday Report: Fed Balance Sheet July 29, 2010

2010 Economic Calendar

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Fed Balance Sheet

Released on 7/29/2010 4:30:00 PM For wk7/28, 2010

	Prior	Actual
Total Assets - Weekly Change	$-8.4 B	$-7.0 B
Reserve Bank credit - Weekly Change	$-0.2 B	$-3.4 B

Highlights
Total assets of the Fed dipped another $7.0 billion for the July 28 week after declining $8.4 billion the previous week. The drop was led by a $7.1 billion fall in the value of holdings of mortgage-backed securities. Currently, the Fed is not purchasing or selling MBSs but the asset amount is changing with market value and payoffs of mortgages. Total assets stand at $2.329 trillion.

Bank reserve credit for the latest week fell $3.4 billion after slipping $0.2 billion during the July 21 week.

Note: Total assets in the Fed's H.4.1 report are Wednesday levels while Reserve Bank credit is an average of daily figures for the week ending on the same Wednesday. Changes in total assets are from Wednesday to Wednesday while changes in Reserve Bank credit are for weekly averages.

Definition
The Fed's balance sheet is a report showing factors supplying reserves into the banking system and factors absorbing (using) reserve funds. Essentially, the balance sheet shows the various Fed programs for injecting liquidity into the economy and how much the Fed has used each for adding or withdrawing reserves. This report is called Factors Affecting Reserve Balances - or the "H.4.1" report using Fed jargon. Why Investors Care