Submitted by Taps Coogan on the 13th of April 2020 to The Sounding Line.

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Last week, the Federal Reserve added $271 billion to its balance sheet as it continues to amass a bewildering diversity of financial assets and as it continues to bailout every financial market in sight. That pushed to Fed’s balance sheet over $6 trillion for the first time, a 62% increase compared to its balance sheet from September.

While $271 billion in one week is a faster pace of ‘money printing’ than during all but one week of the financial crisis, it is actually a considerable slowdown from the two weeks prior when the Fed ‘printed’ $586 and $557 respectively. The primary driver of the ‘slowdown’ in the Fed’s balance sheet growth last week was a decline in repo holdings. As the Fed has scaled up its full-bore QE, banks’ requirement to borrow reserves in the repo markets appears to finally be subsiding. Nothing like an unlimited bailout to shore up banks’ balance sheets.

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