Apparently, Operation Twist is not entirely smooth every week as mortgage-backed securities fell faster than gains in Treasury holdings. For the February 29 week, the Fed's balance sheet fell $7.1 billion after declining $5.1 billion the week before. The decline was led by a $12.3 billion decrease in mortgage-backed securities. Holdings of Treasuries were partially offsetting, gaining $4.9 billion.
Total assets for the February 29 week decreased to $2.928 trillion.
Reserve Bank credit for the February 29 week declined $9.2 billion after shrinking $0.7 billion the prior period.
Note: Total assets in the Fed's H.4.1 report are Wednesday levels while Reserve Bank credit is an average of daily figures for the week ending on the same Wednesday. Changes in total assets are from Wednesday to Wednesday while changes in Reserve Bank credit are for weekly averages.
The Fed's balance sheet is a report showing factors supplying reserves into the banking system and factors absorbing (using) reserve funds. Essentially, the balance sheet shows the various Fed programs for injecting liquidity into the economy and how much the Fed has used each for adding or withdrawing reserves. This report is called Factors Affecting Reserve Balances - or the "H.4.1" report using Fed jargon.
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