U.S. Fed balance sheet shrinks in latest week

NEW YORK, Sept 22 Thu Sep 22, 2011 4:30pm EDT

NEW YORK, Sept 22 (Reuters) - The U.S. Federal Reserve's balance sheet shrank in the latest week as the central bank reduced its holdings of mortgage-backed and agency debt securities, Fed data released on Thursday showed.

The Fed's balance sheet -- a broad gauge of its lending to the financial system -- was $2.841 trillion on Sept. 21, compared with $2.847 trillion on Sept. 14.

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For balance sheet graphic: link.reuters.com/buf92k

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The Fed's ownership of mortgage bonds guaranteed by Fannie Mae (FNMA.OB), Freddie Mac (FMCC.OB) and the Government National Mortgage Association (Ginnie Mae) dipped to $879.2 billion on Wednesday from $884.9 billion a week previous.

The Fed's holdings of debt issued by Fannie Mae, Freddie Mac and the Federal Home Loan Bank system totaled $108.3 billion, down from $109.8 billion in the previous week.

Meanwhile, the Fed's holdings of Treasuries totaled $1.663 trillion, up from $1.659 trillion the previous week.

The Fed's overnight direct loans to credit-worthy banks via its discount window averaged $23 million a day in the week ended Wednesday, up from $19 million a day in the previous week. (Reporting by Chris Reese; Editing by Padraic Cassidy)