/biz/ - Business & Finance

Reminder that the declining balance sheet is an illusion caused by swaps from a few months ago maturing.

>>20167838
When things were shaky earlier this year, demand for the dollar was high and foreign central banks swapped their currency for dollars for a set time period with the Fed. These swaps have matured and now the foreign currencies are moving off the Fed balance sheet.

Pretty much everything is on the Fed balance sheet. It's still not being added to at anywhere near the rate it was earlier this year, but look at the items that went down last week, it's mostly central bank liquidity swaps. If those weren't maturing right now, we'd be net adding to the balance sheet.