{"id":38747,"date":"2018-10-05T07:32:35","date_gmt":"2018-10-05T12:32:35","guid":{"rendered":"http:\/\/olduvai.ca\/?p=38747"},"modified":"2018-10-05T07:32:35","modified_gmt":"2018-10-05T12:32:35","slug":"the-feds-qe-unwind-reaches-285-billion","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=38747","title":{"rendered":"The Fed\u2019s QE Unwind Reaches $285 Billion"},"content":{"rendered":"<header>\n<h3 class=\"entry-title\"><a href=\"https:\/\/wolfstreet.com\/2018\/10\/04\/feds-balance-sheet-normalization-reaches-285-billion\/\">The Fed\u2019s QE Unwind Reaches $285 Billion<\/a><\/h3>\n<\/header>\n<div class=\"entry-content\">\n<p><strong>The \u201cup to\u201d begins to matter for the first time.<\/strong><\/p>\n<p>The Fed released its weekly <a href=\"https:\/\/www.federalreserve.gov\/releases\/h41\/\" target=\"_blank\" rel=\"noopener\">balance sheet<\/a> Thursday afternoon. Over the four-week period from September 6 through October 3, total assets on the Fed\u2019s balance sheet dropped by $34 billion. This brought the decline since October 2017, when the QE unwind began, to $285 billion. At $4,175 billion, total assets are now at the lowest level since March 5, 2014:<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-45124\" src=\"https:\/\/wolfstreet.com\/wp-content\/uploads\/2018\/10\/US-Fed-Balance-sheet-2018-10-04-overall-.png\" alt=\"\" width=\"508\" height=\"348\" \/><\/p>\n<p>During QE, the Fed bought Treasury securities and mortgage-backed securities (MBS). During the \u201cbalance sheet normalization,\u201d the Fed is shedding those securities. But the balance sheet also reflects the Fed\u2019s other activities, and so the amount of its total assets is higher than the combined amount of Treasury securities and MBS it holds, and the changes in total assets also reflect its other activities.<\/p>\n<p>The QE unwind was still in ramp-up mode in September, according to the Fed\u2019s plan. For September, the Fed was scheduled to shed \u201cup to\u201d $24 billion in Treasuries and \u201cup to\u201d $16 billion in MBS.<\/p>\n<p>From September 6 through October 3, the Fed\u2019s holdings of Treasury Securities fell by $19 billion to $2,294 billion, the lowest since March 5, 2014. Since the beginning of the QE-Unwind, the Fed has shed $172 billion in Treasuries:<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-45125\" src=\"https:\/\/wolfstreet.com\/wp-content\/uploads\/2018\/10\/US-Fed-Balance-sheet-2018-10-4-Treasuries.png\" alt=\"\" width=\"510\" height=\"401\" \/><\/p>\n<p><strong>The \u201cup to\u201d begins to matter<\/strong><\/p>\n<p>Though the plan calls for shedding \u201cup to\u201d $24 billion in Treasury securities in September, the Fed shed only $19 billion. Here\u2019s what happened \u2013 and why this will happen more often going forward:<\/p>\n<p>When the Fed sheds Treasury securities, it doesn\u2019t sell them outright but allows them to \u201croll off\u201d when they mature; Treasuries mature mid-month or at the end of the month. Hence, the step-pattern of the QE unwind in the chart above.<\/p>\n<p>\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>The Fed\u2019s QE Unwind Reaches $285 Billion The \u201cup to\u201d begins to matter for the first time. The Fed released its weekly balance sheet Thursday afternoon. Over the four-week period from September 6 through October 3, total assets on the Fed\u2019s balance sheet dropped by $34 billion. This brought the decline since October 2017, when [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[303,4084,661,17394,662,8625,3650,4254,4255],"class_list":["post-38747","post","type-post","status-publish","format-standard","hentry","category-economics","tag-fed","tag-monetary-tightening","tag-qe","tag-qe-unwind","tag-quantitative-easing","tag-quantitative-tightening","tag-us-federal-reserve","tag-wolf-richter","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/38747","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=38747"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/38747\/revisions"}],"predecessor-version":[{"id":38748,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/38747\/revisions\/38748"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=38747"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=38747"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=38747"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}