Fed balance sheet expands in latest week

NEW YORK Thu Nov 15, 2012 4:31pm EST

NEW YORK (Reuters) - The Federal Reserve's balance sheet expanded in the latest week with increased holdings of federal government debt and mortgage-backed securities, Fed data released on Thursday showed.

The Fed's balance sheet - a broad gauge of its lending to the financial system - stood at $2.859 trillion on November 14, up from $2.813 trillion on November 7.

The Fed's holdings of Treasuries totaled $1.657 trillion as of Wednesday from $1.651 trillion the previous week.

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) totaled $889.02 billion compared with $852.06 billion the previous week.

The jump in agency MBS stemmed from the settlement on the central bank's latest purchases earlier this week tied to its third round of quantitative easing, known as QE3, analysts said.

The Fed's open-ended purchases of MBS are intended to help housing market with the goal to foster U.S. economic growth.

The Fed's holdings of debt issued by Fannie Mae, Freddie Mac and the Federal Home Loan Bank system was unchanged on the week at $81.90 billion.

The Fed's overnight direct loans to credit-worthy banks via its discount window averaged $13 million a day during the week from a $9 million a day average rate the prior week.

(Reporting by Richard Leong; Editing by Leslie Adler)

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