US Fed increases holdings of Treasury securities

0 Comment(s)Print E-mail Xinhua, September 6, 2019
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Data from the U.S. Federal Reserve (Fed) showed on Thursday that the central bank increased its holdings of U.S. Treasury securities after it announced an early conclusion of its "Balance Sheet Normalization" process.

For the week ending Sept. 4, the average daily figure of Fed holdings of U.S. Treasury securities rose by 3,871 million U.S. dollars to 2,095,140 million dollars.

The majority of U.S. Treasury securities that the Fed holds were longer term securities issued by the U.S. government like Treasury notes and Treasury bonds, which totaled 1,951,802 million dollars, according to the Fed.

The U.S. Fed purchased government-issued securities and other securities like Mortgage-backed securities (MBS) from the market in order to boost the money supply and encourage lending and investment after the 2008 financial crisis.

Commonly known as "quantitative easing," the unconventional monetary policy left the central bank with a massive holding of securities and the MBS, providing more liquidity to the U.S. financial market to counter the headwind of crisis.

Meanwhile, the data also showed that the central bank decreased its holding of the MBS. The average daily figure of MBS holdings dropped 6,326 million dollars to 1,489,605 million dollars, for the same week.

In March, the Fed said that it intends to conclude the reduction of its aggregate securities holdings at the end of September. The process, known as "Balance Sheet Normalization," started in October 2017.

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