Fed Balance Sheet

Everyone’s got a balance sheet…even the Fed (er, well, especially the Fed). The Fed balance sheet shows all of the assets and liabilities of the U.S. central bank, a.k.a. the Federal Reserve. The assets are mostly U.S. Treasury debt and mortgage-backed securities, and the liabilities are mostly commercial bank deposits.

Since the Fed is tinkering with the money flow (that whole "monetary policy" thing that keeps unemployment and inflation balanced with each other), the Fed balance sheet shows all of this. Economists and analysts can see where on the Fed balance sheet that cash was infused into the economy, verses when the Fed bought up securities for quantitative easing, on the Factors Affecting Reserve Balances Report, as it is officially (and creatively, for economists) called.

The Fed balance sheet didn’t used to be a big daily news item...until it became one juuuust as the world was about to end in 2008. Around the time of the financial crisis, when everyone was grasping at straws in a panic, the Fed balance sheet gave analysts an idea of what and how much the Fed was doing to pull America out of the economic crisis. The U.S. owes dough; we are owed dough; lather, rinse, repeat.