WEEKLY FED BALANCE SHEET REVIEW. FINALLY SOME DECENT NUMBERS!
. Federal Reserve: "Factors Affecting Reserve Balances", September 26

- Fed's Treasuries holdings: $783.6bn (+$9.5bn)
- Other central banks' Treasuries holdings: $1,214.8bn (+$3.9bn) (*)
- Other central banks' agency securities: $780.4 (+$3.9bn) (*)
- Global Dollar Liquidity Measure: $2,778.9bn (+$17.3bn)

(*) Off-balance-sheet items
agustin_mackinlay@yahoo.com
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After six weeks of misery, the weekly Fed balance sheet finally produces a set of decent numbers. Our Global Dollar Liquidity measure registers a $17.3bn increase, the best performance in 17 weeks. While the quality of the change leaves much to be desired —repo operations account for more than half of the increase— it is worth noting that borrowings at the discount window are back at their pre-crisis levels (i.e., almost non-existing).

In terms of the Global Dollar Liquidity measure, September closes at a 13.6% annual rate of growth, signalling a strong, if unspectacular, rate of global economic growth. Note also that, despite talk of the Fed "inundating" markets with excess liquidity, the stock of Treasury securities held by the U.S. central bank (a proxy for the monetary base) is growing at the rather modest rate of ... 2.5%, a six-month low. Will dollar bulls take note?