September 9, 2010 / 8:48 PM / 7 years ago

UPDATE 1-US Fed's balance sheet grows slightly in latest week

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NEW YORK, Sept 9 (Reuters) - The U.S. Federal Reserve’s balance sheet grew slightly in the latest week, Fed data released on Thursday showed.

The balance sheet -- a broad gauge of Fed lending to the financial system -- rose to $2.288 trillion in the week ended Sept. 8 from $2.285 trillion the previous week.

Fed balance sheet liabilities remain below their record high of $2.334 trillion hit in May. After declining early last year, the balance sheet surged amid the U.S. central bank's asset-buying program. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ (For graphic of the Federal Reserve's balance sheet, please see: link.reuters.com/buf92k) ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

The program, known as quantitative easing, was broadly aimed at holding down borrowing costs and supporting the ailing housing market as the economy recovered from the worst recession in 70 years.

That effort was also led by the Fed’s purchases of mortgage-related securities, which came to a conclusion at the end of March.

However, the Fed took a small but significant step on Aug. 10 to counter a weakening U.S. economic recovery, saying it would use cash from maturing mortgage bonds it holds to buy more government debt.

The Fed’s holdings of mortgage-backed securities backed by housing finance companies Fannie Mae FNMA.OB and Freddie Mac FMCC.OB totaled $1.103 trillion on Sept. 8, unchanged from the previous week.

The U.S. central bank’s ownership of debt issued by Fannie Mae, Freddie Mac and the Federal Home Loan Bank System was $156.50 billion on Sept. 8, steady from the previous week.

Primary credit via the Fed’s discount window averaged $29 million per day in the latest week versus $13 million per day in the previous week. (Reporting by Chris Reese; Editing by Chizu Nomiyama)

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