Fed Increased Balance Sheet $5.7 B Last Week

The Fed increased its balance sheet by $5.7 billion in the week ended June 13. Treasuries rose $126 million, the rest was MBS.

The rise this week raised the Fed's impending reduction to $31.1 billion for the last two weeks of June. Assuming the Fed reduced over two weeks, the comparable period is the two weeks ending April 25 and May 2, when the Fed reduced $29.8 billion over two weeks. The S&P 500 Index lost 2.7 percent over that period. Of the remaining total, the Fed has to reduce treasury holdings by $19.8 billion. The Fed might wait until three weeks from now, on June 30, when $30.5 billion in treasuries mature.

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