From Mr. Abate's Weekly Federal Reserve Balance Sheet Report --
Despite the settlement of nearly $30bn in liquid assets this week, the Federal Reserve’s overall balance sheet contracted with reserve balances falling by nearly $30bn.
- The various Federal Reserve liquidity programs are rapidly disappearing – and most could be gone by the end of summer.
- Declines in the CP-FF may slow in coming weeks as the paper left in the program remains challenged.
- Detailed monthly data from the Federal Reserve indicate that borrowing from these facilities remains highll concentrated among just a handful of banks and issuers.
- The recent contraction in bank reserves has not pushed the effective funds rate higher.