The Fed’s balance sheet exceeds $5 trillion for the first time in history amid the bank’s wave of coronavirus relief efforts

Kevin Lamarque/Reuters

• The Federal Reserve’s balance sheet surpassed $5 trillion for the first time as the coronavirus threat drove major liquidity operations.
• The central bank added $586 billion worth of assets in the week ended March 25, according to a Thursday release, bringing its total holdings to $5.3 trillion.
• Treasury and mortgage-backed securities accounted for $355 billion in Fed purchases, arriving days after the bank lifted its limit for asset buying.
• Credit extended to banks over the period reached $50.8 billion.
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The Federal Reserve’s emergency relief efforts through March pushed its balance sheet past $5 trillion for the first time.

The central bank added $586 billion worth of assets in the week ended March 25, according to a Thursday release, bringing its total holdings to $5.3 trillion. Credit extended to banks swelled to $50.8 billion as firms prepared for increased borrowing amid the economic slowdown.

Recession risks posed by the coronavirus pandemic prompted the Fed to step in with an array of monetary stimulus actions. The bank announced Monday it would lift the limit for asset purchases and establish three new credit facilities to aid businesses, consumers, and employers.

Treasury and mortgage-backed securities made up $355 billion in Fed purchases through the past week as the bank looked to calm markets buffeted by the coronavirus’s economic shock. The bank’s bond purchases echo programs used in the wake of the financial crisis, through bond purchases executed through March have already surpassed the totals seen after the 2008 meltdown.

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The Fed’s new Primary Dealer Credit Facility injected $27.7 billion in loans to large employers as of Wednesday. The central bank’s new Money Market Mutual Fund offered $30.6 billion, according to the release.

The Fed offered more than $200 billion through foreign-currency exchange lines to other central banks to ease the flow of US dollars to international borrowers. 

A Main Street Business Lending Program to aid smaller businesses is set to be announced by the Fed in the near future, the bank said Monday.

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