The Daily Feather — Fed & Bank Balance Sheets 101

Before we had Chat Generative Pre-trained Transformer, we had, and still have, Investopedia. The Google search’s description of investors’ encyclopedia “Understanding the Federal Reserve Balance Sheet” beats AI in its brilliance amidst the confusion being fomented by misinformation mongers with agendas. “The Fed balance sheet is a financial statement published once a week that shows what the Federal Reserve (Fed) owns and owes.” As of March 23^rd, via past years’ Quantitative Easing, the Fed owns $7.9 trillion of “Securities held outright.” Like any bank, loans on the Fed’s balance sheet also feed the asset bucket; they’re also owned and amounted to $354 billion including discount window lending and the Fed’s new Bank Term Funding Program (BTFP, $53.7B), which frees banks to satisfy deposit withdrawals and locks down pledged securities. As for what the Fed owes, that’s largely U.S. currency in circulation and the reserves deposited by commercial banks.