Overview
Recent Developments
The Overview section of this report highlights recent developments in the operations of the Federal Reserve's monetary policy tools and presents data describing changes in the assets, liabilities, and total capital of the Federal Reserve System as of February 26, 2020.
FOMC Changes Target Range for the Federal Funds Rate; Federal Reserve Announces Associated and Related Implementation Steps
- On October 30, 2019, the Federal Open Market Committee (FOMC) announced that it had decided to lower the target range for the federal funds rate to 1-1/2 to 1-3/4 percent, from 1-3/4 to 2 percent. On March 3, 2020, the FOMC announced that it had decided to lower the target range to 1 to 1-1/4 percent. Additional information on the FOMC's decisions are available at https://www.federalreserve.gov/newsevents/pressreleases/monetary20191030a.htm, https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20191030.pdf, and https://www.federalreserve.gov/newsevents/pressreleases/monetary20200303a.htm.
- To implement its monetary policy stance, effective October 31, 2019, the FOMC directed the Federal Reserve Bank of New York (FRBNY) to conduct open market operations (OMOs) as necessary to maintain the federal funds rate in a target range of 1-1/2 to 1-3/4 percent, and effective March 4, 2020 directed the FRBNY to conduct OMOs as necessary to maintain the federal funds rate in a target range of 1 to 1-1/4 percent. In related actions, effective October 31, 2019, the Board of Governors of the Federal Reserve System (Board) lowered the interest rate paid on required and excess reserve balances to 1.55 percent and approved a 1/4 percentage point decrease in the discount rate (the primary credit rate) to 2.25 percent, and effective March 4, 2020, lowered the interest rate paid on required and excess reserve balances to 1.10 percent and approved a 1/2 percentage point decrease in the discount rate to 1.75 percent.2 Additional information is available at https://www.federalreserve.gov/newsevents/pressreleases/monetary20191030a1.htm and https://www.federalreserve.gov/newsevents/pressreleases/monetary20200303a1.htm.
- In addition, the FOMC directed the FRBNY to continue rolling over at auction all principal payments from the Federal Reserve's holdings of Treasury securities maturing during each calendar month, and reinvesting all principal payments from the Federal Reserve's holdings of agency debt and agency mortgage-backed securities (MBS) received during each calendar month. Small deviations from these amounts for operational reasons are acceptable.
This Report and the Federal Reserve's Response to COVID-19
This report was prepared in early March 2020 and has an information cutoff of March 4, 2020. As such, it does not include information on the Federal Reserve's actions in response to COVID-19.
For information on the Federal Reserve's response to COVID-19, see the COVID-19 Response page at https://www.federalreserve.gov/covid-19.htm.
Federal Reserve Board Publishes Annual Financial Statements
- On March 23, 2020, the Federal Reserve System released the 2019 audited financial statements for the combined Federal Reserve Banks, the 12 individual Reserve Banks, and the Board. Additional information can be found in the section of the report entitled "Federal Reserve Banks' Financial Information." The Federal Reserve System financial statements are available on the Board's website at https://www.federalreserve.gov/aboutthefed/audited-annual-financial-statements.htm.
Federal Reserve System Assets, Liabilities, and Total Capital
Table 1 reports selected assets, liabilities, and total capital of the Federal Reserve System and presents the change in these components over selected intervals. The Federal Reserve publishes its complete balance sheet each week in the H.4.1 statistical release, "Factors Affecting Reserve Balances of Depository Institutions and Condition Statement of Federal Reserve Banks," available at https://www.federalreserve.gov/releases/h41/.
Table 1. Assets, liabilities, and capital of the Federal Reserve System
Billions of dollars
| Item | Current February 26, 2020 |
Change from October 23, 2019 |
Change from February 27, 2019 |
|---|---|---|---|
| Total assets | 4,159 | 190 | 184 |
| Selected assets | |||
| Securities held outright | 3,848 | 239 | 56 |
| U.S. Treasury securities 1 | 2,474 | 325 | 292 |
| Federal agency debt securities 1 | 2 | 0 | –* |
| Mortgage-backed securities2 | 1,372 | –86 | –236 |
| Memo: Overnight securities lending3 | 29 | 7 | 8 |
| Memo: Net commitments to purchase mortgage-backed securities4 | 3 | –3 | 2 |
| Unamortized premiums on securities held outright 5 | 123 | –4 | –14 |
| Unamortized discounts on securities held outright 5 | –13 | –* | –* |
| Repurchase agreements6 | 143 | –*35 | 143 |
| Lending to depository institutions 7 | * | –* | +* |
| Central bank liquidity swaps8 | * | +* | –* |
| Net portfolio holdings of Maiden Lane LLC | * | –* | –* |
| Foreign currency denominated assets9 | 20 | –* | –1 |
| Total liabilities | 4,120 | 191 | 185 |
| Selected liabilities | |||
| Federal Reserve notes in circulation | 1,752 | 27 | 87 |
| Reverse repurchase agreements 10 | 220 | –86 | –31 |
| Foreign official and international accounts 10 | 218 | –70 | –31 |
| Others 10 | 2 | –16 | +* |
| Term deposits held by depository institutions | 0 | 0 | 0 |
| Other deposits held by depository institutions | 1,680 | 228 | –2 |
| U.S. Treasury, General Account | 388 | 13 | 122 |
| Other deposits 11 | 69 | 9 | 10 |
| Total capital | 39 | –* | –* |
Note: Unaudited. Components may not sum to totals because of rounding.
* Less than $500 million.
1. Face value. Return to table
2. Guaranteed by Fannie Mae, Freddie Mac, and Ginnie Mae. The current face value shown is the remaining principal balance of the securities. Return to table
3. Securities loans under the overnight facility are off-balance-sheet transactions. These loans are shown here as a memo item to indicate the portion of securities held outright that have been lent through this program. Return to table
4. Current face value. Includes commitments associated with outright purchases, dollar rolls, and coupon swaps. Return to table
5. Reflects the premium or discount, which is the difference between the purchase price and the face value of the securities that has not been amortized. For U.S. Treasury securities, federal agency debt securities, and mortgage-backed securities, amortization is on an effective-interest basis. Return to table
6. Cash value of agreements. Return to table
7. Total of primary, secondary, and seasonal credit. Return to table
8. Dollar value of the foreign currency held under these agreements valued at the exchange rate to be used when the foreign currency is returned to the foreign central bank. This exchange rate equals the market exchange rate used when the foreign currency was acquired from the foreign central bank. Return to table
9. Revalued daily at current foreign currency exchange rates. Return to table
10. Cash value of agreements, which are collateralized by U.S. Treasury securities, federal agency debt securities, and mortgage-backed securities. Return to table
11. Includes deposits held at the Reserve Banks by international and multilateral organizations, government-sponsored enterprises, designated financial market utilities, and deposits held by depository institutions in joint accounts in connection with their participation in certain private-sector payment arrangements. Also includes certain deposit accounts other than the U.S. Treasury, General Account, for services provided by the Reserve Banks as fiscal agents of the United States. Return to table
Figure 1 displays the levels of selected Federal Reserve assets and liabilities, securities holdings, and credit extended through liquidity facilities since April 2010.
Figure 1. Credit and liquidity programs and the Federal Reserve's balance sheet
References
2. On January 29, 2020, the Board increased the interest rate paid on required and excess reserve balances to 1.60 percent. This technical adjustment set the interest rate paid on required and excess reserve balances at 10 basis points above the bottom of the target range for the federal funds rate and was intended to foster trading in the federal funds market at rates well within the FOMC's target range. Return to text