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Fed's Bill-Buying Policy Expands Balance Sheet $178B
The Fed's December 10 directive to buy short-term Treasury bills has added $178 billion to its balance sheet, a shift from past QE that left long-term rates to market forces.
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On December 10, the Federal Open Market Committee authorized the Open Market Trading Desk to buy Treasury bills and other securities with maturities of three years or less. The directive aims to maintain an ample level of reserves. Since the policy took effect, the Fed's balance sheet has expanded by $178 billion, central bank data show.
The purchases differ from the quantitative easing programs the Fed ran from 2008 to 2014. In those rounds, the New York Fed said the central bank bought longer-term Treasury securities and agency mortgage-backed securities. QE1 included $300 billion in longer-term Treasuries and $1.25 trillion in agency MBS. QE3 added $790 billion in longer-term Treasuries and $823 billion in agency MBS.