Banks pared borrowing from the Federal Reserve during the past week, reducing their dependence on the central bank after stocking up on cash at the end of 2008, the Fed’s consolidated balance sheet showed today.
Discount window lending to commercial banks fell to $83.7 billion as of yesterday, from $93.8 billion the previous Wednesday, the central bank said in a release in Washington. Primary dealers reduced their borrowings from the Fed to $34.3 billion yesterday from $37.4 billion Dec. 31.
The Fed may still build on the $1.26 trillion increase in its total assets over the past year after a Dec. 16 Federal Open Market Committee decision to switch the focus of monetary policy to the balance sheet and away from interest rates.
The FOMC voted last month to reduce the federal funds rate to a range of zero to 0.25 percent and committed to lowering yields for consumers and businesses through asset purchases.
Outstanding loans to banks through the Term Auction Facility dropped to $384 billion from $450.2 billion, the Fed release showed.
The Fed’s holdings of commercial paper in a program helping U.S. corporations finance short-term notes was little changed at $334.5 billion yesterday from $334.4 billion a week earlier.
Total holdings of federal agency securities fell to $19.3 billion as of yesterday from $19.7 billion the previous week.
Mortgage Securities Purchased
Separately, the Fed said today it bought $10.2 billion of mortgage-backed securities under a $500-billion program aimed at lowering home-loan rates begun this week. Only fixed-rate- mortgage bonds guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae will be eligible for purchases.
BlackRock Inc., Goldman Sachs Asset Management, Pacific Investment Management Co. and Wellington Management Co. are managing the purchases.
Credit to American International Group Inc. was little changed at $82.6 billion from $82.7 billion, while the Fed’s loans to a program providing liquidity to the asset-backed commercial paper market dropped to $21.1 billion from $23.8 billion.
The Fed said the M2 money supply rose by $5.3 billion in the week ended Dec. 29. That left M2 growing at an annual rate of 8.1 percent for the past 52 weeks, above the target of 5 percent the Fed once set for maximum growth. The Fed no longer has a formal target.
The Fed reports two measures of the money supply each week. M1 includes all currency held by consumers and companies for spending, money held in checking accounts and travelers checks. M2, the more widely followed, adds savings and private holdings in money market mutual funds.
During the latest reporting week, M1 increased by $14 billion. Over the past 52 weeks, M1 rose 11.8 percent. The Fed no longer publishes figures for M3.
Banks Pare Fed Loans After Increase for Year-End Cash - By Scott Lanman
8 January 2009, BloombergBanks pared borrowing from the Federal Reserve during the past week, reducing their dependence on the central bank after stocking up on cash at the end of 2008, the Fed’s consolidated balance sheet showed today.
Discount window lending to commercial banks fell to $83.7 billion as of yesterday, from $93.8 billion the previous Wednesday, the central bank said in a release in Washington. Primary dealers reduced their borrowings from the Fed to $34.3 billion yesterday from $37.4 billion Dec. 31.
The Fed may still build on the $1.26 trillion increase in its total assets over the past year after a Dec. 16 Federal Open Market Committee decision to switch the focus of monetary policy to the balance sheet and away from interest rates.
The FOMC voted last month to reduce the federal funds rate to a range of zero to 0.25 percent and committed to lowering yields for consumers and businesses through asset purchases.
Outstanding loans to banks through the Term Auction Facility dropped to $384 billion from $450.2 billion, the Fed release showed.
The Fed’s holdings of commercial paper in a program helping U.S. corporations finance short-term notes was little changed at $334.5 billion yesterday from $334.4 billion a week earlier.
Total holdings of federal agency securities fell to $19.3 billion as of yesterday from $19.7 billion the previous week.
Mortgage Securities Purchased
Separately, the Fed said today it bought $10.2 billion of mortgage-backed securities under a $500-billion program aimed at lowering home-loan rates begun this week. Only fixed-rate- mortgage bonds guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae will be eligible for purchases.
BlackRock Inc., Goldman Sachs Asset Management, Pacific Investment Management Co. and Wellington Management Co. are managing the purchases.
Credit to American International Group Inc. was little changed at $82.6 billion from $82.7 billion, while the Fed’s loans to a program providing liquidity to the asset-backed commercial paper market dropped to $21.1 billion from $23.8 billion.
The Fed said the M2 money supply rose by $5.3 billion in the week ended Dec. 29. That left M2 growing at an annual rate of 8.1 percent for the past 52 weeks, above the target of 5 percent the Fed once set for maximum growth. The Fed no longer has a formal target.
The Fed reports two measures of the money supply each week. M1 includes all currency held by consumers and companies for spending, money held in checking accounts and travelers checks. M2, the more widely followed, adds savings and private holdings in money market mutual funds.
During the latest reporting week, M1 increased by $14 billion. Over the past 52 weeks, M1 rose 11.8 percent. The Fed no longer publishes figures for M3.
Di pos oleh Arbain Muhayat pada 14 January 2009