Dissecting The Fed’s Balance Sheet

Posted July 21, 2014

The third video for Macro Watch Third Quarter 2014 has been uploaded and is now ready to watch.

In this video, we dissect the Fed’s balance sheet. On the asset side, we see which assets the Fed has acquired with the $3.5 trillion it has created since 2009; and we discuss the impact those asset purchases have had on the economy. The impact has been extraordinarily positive, but will the economy remain “reflated” after QE ends in October?

On the liability side, we look at the build up of excess reserves held by the banks. Some interesting questions emerge. Did you know that nearly half of the excess reserves held at the Fed belong to foreign banks? What does that tell us about their asset quality?

Finally, we see where to find and how to download the current and historic data from the Fed’s Balance Sheet.

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