UPDATE 1-U.S. Fed balance sheet shrinks on fewer MBS

(Adds details from latest Fed data)

NEW YORK, March 4 (BestGrowthStock) – The U.S. Federal Reserve’s
balance sheet shrank slightly in the latest week due to a
decline in its holdings of mortgage-related securities, Fed
data released on Thursday showed.

The Fed’s balance sheet liabilities — a broad gauge of its
lending to the financial system — slipped to $2.262 trillion
on Wednesday from $2.269 trillion last week but was still not
far below its record of $2.274 trillion set on Jan. 13.

The Fed’s holdings of mortgage-backed securities backed by
U.S. housing finance agencies Fannie Mae (FNM.N: ) and Freddie
Mac (FRE.N: ) fell to $1.027 trillion on Wednesday from $1.033
trillion a week earlier.

But the central bank’s ownership of debt issued by Fannie
Mae, Freddie Mac and the Federal Home Loan Bank System rose to
$167.51 billion from $166.53 billion a week ago.

At the end of March, the Fed will complete its mortgage
securities purchases, the pillar of its quantitative easing
program that was adopted to hold down home borrowing costs in a
bid to revive the battered housing sector.

The Fed has committed to buy about $175 billion of agency
debt and $1.25 trillion of agency MBS.

As the Fed’s overall securities holdings retreated from a
week earlier, its direct overnight lending to top-rated banks
slowed from last week.

Primary credit via the Fed’s discount window averaged
$13.773 billion a day in week ended Wednesday. This was slower
than the average daily pace of $13.960 billion last week.

Stock Basics

(Reporting by Richard Leong; Editing by James Dalgleish)

UPDATE 1-U.S. Fed balance sheet shrinks on fewer MBS