The Federal Reserve is under a new chairman, and the new policy is still one that will come with ongoing bond purchase tapering. Still, the Fed’s balance sheet keeps growing and is moving further above the 4 trillion mark.
While Janet Yellen testified on Thursday, she said that the tapering of bond purchases would continue. At least it will continue barring any serious change.
For the week that ended on February 26, 2014, the total assets on the Fed’s balance sheet were $4.16 trillion ($4.1599T rounded up). This was a gain of $10.75 billion from the prior week, but is up a whopping $1.07 trillion from the same week a year ago.
Treasury securities grew by $10.4 billion up to $2.171 trillion. Mortgage-backed securities grew by $1.38 billion in the last week to $1.57 trillion. Compared to a year ago, this is $528.7 billion higher in Treasury securities and $554.1 billion higher in mortgage-backed securities.
The markets have absorbed the bond tapering quite well. The S&P 500 has hit yet another high. And since the end of 2013, the 10-year Treasury yield has fallen from just over 3.0% down to 2.65%.