In the Asian session on Friday (April 7), the U.S. dollar index rose, with the latest price of the U.S. dollar at 101.92, an increase of 0.01%. The Fed‘s balance sheet shrank again in the latest week to $8.63 trillion, a shrinkage of $73.558 billion, the largest weekly drop since July 2020.
The decline in size was largely driven by quantitative tightening, with holdings of Treasuries and MBS down by a combined $49 billion to $7.877 trillion. The Federal Reserve’s emergency lending to banks fell slightly to $149 billion, or BTFP+ discounted, but it was still much higher than the $4.5 billion before the Silicon Valley Bank incident, which also led to a sharp increase in the Fed’s balance sheet in the previous weeks. Meanwhile, loans to FDIC bridge banks fell to $174.6 billion from $180.1 billion a week earlier.
