by Calculated Risk on 2/19/2009 04:30:00 PM

The Federal Reserve released the Factors Affecting Reserve Balances today. Total assets increased $72.2 billion to $1.92 trillion. The increase was mostly due to the Federal Reserve buying $57.9 billion in mortgage-backed securities (MBS) guaranteed by Fannie Mae, Freddie Mac, and Ginnie Mae.


Click on graph for larger image in new window.

After spiking last year to $2.31 trillion the week of Dec 18th, the Federal Reserve assets have declined somewhat. Now it looks like the Federal Reserve is starting to expand their balance sheet again.

In a related story from Reuters: U.S. mortgage rates drop toward record low: Freddie

Interest rates on standard U.S. 30-year mortgages dropped in the latest week to levels just shy of record lows as concerns of a deepening recession boosted the appeal of fixed-rate investments, Freddie Mac said on Thursday.

The average fixed 30-year mortgage rate declined to 5.04 percent in the week ending Thursday, from 5.16 percent in the previous period, Freddie Mac said in a statement. That was close to the 4.96 percent reached in mid-January, which was the lowest rate since Freddie Mac began its survey in 1971.

Note: the graph shows Total Factors Supplying Federal Reserve Funds and is an available series that is close to assets.

Three trillion here we come!