Global Economic Briefing: Central Bank Balance Sheets

Global Economic Briefing:

Central Bank Balance Sheets

Yardeni Research, Inc.

August 11, 2016

Dr. Edward Yardeni

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Mali Quintana

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Table Of Contents

_{Table Of Contents}

_{Table Of Contents}

Total Assets of Major Central Banks

1

Fed Balance Sheet

2

Fed Assets

3

Fed Bond Purchases

4

Federal Reserve Repo Balances

5

ECB Balance Sheet

6

Bank of Japan

7

PBOC Balance Sheet

8

Figure 1.

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2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 .6

1.0 1.4 1.8 2.2 2.6 3.0 3.4 3.8 4.2 4.6 5.0

Jul

FED

Total (4.4)

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 1.9 2.2 2.5 2.8 3.1 3.4 3.7 4.0 4.3

Jun

ECB

Total (3.5)

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 .8

1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 2.6 2.8 3.0 3.2 3.4 3.6 3.8 4.0 4.2 4.4

Jul

BOJ

Total (4.3)

* Includes US, ECB, Bank of Japan, and PBOC. Source: Haver Analytics.

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2.2 2.7 3.2 3.7 4.2 4.7 5.2 5.7

Jun

PBOC

Total (5.1)

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Total Assets of Major Central Banks

Figure 2.

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 .0 .5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 8/10

FED’S ASSETS*

US Treasuries + Agency Debt + MBS

Liquidity Facilities

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 .5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 8/10

FED’S LIABILITIES*

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 .0 .3 .6 .9 1.2 1.5 1.8 2.1 2.4 2.7 8/10

Agency Debt + MBS US Treasury Securities

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 .0 .3 .6 .9 1.2 1.5 1.8 2.1 2.4 2.7 3.0 8/10 Reserve Balances with Fed (Depository Institutions’ Deposits at Fed)

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 .0 .2 .4 .6 .8 8/10 Central Bank Liquidity Swaps Other Loans

*Average of daily figures for weeks ending Wednesdays. Source: Federal Reserve Board.

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 .76 .80 .84 .88 .92 .96 1.00 1.04 1.08 1.12 1.16 1.20 1.24 1.28 1.32 1.36 1.40 1.44 8/10

Federal Reserve Notes

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2008 2009 2010 2011 2012 2013 2014 2015 2016 .4 .8 1.2 1.6 2.0 2.4 2.8 3.2 3.6 4.0 4.4 4.8 .4 .8 1.2 1.6 2.0 2.4 2.8 3.2 3.6 4.0 4.4 4.8

QE1

QE2

QE3 & QE4

FED’S

ASSETS*

(trillion dollars)

Total Assets US Treasuries + Agency Debt + MBS

Note: QE1 (announced 11/25/08) = Fed buys $1.24tn in mortgage securities. QE2 (announced 11/3/10) = Fed buys $600bn in Treasuries.

QE3 (announced 9/13/12) = Fed buys $40bn/month in mortgage securities (to infinity and beyond). QE4 (announced 12/12/12) = Fed buys $45bn/month in Treasuries.

* Average of daily figures for weeks ending Wednesday.

Source: Federal Reserve Board.

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Figure 3.

2008 2009 2010 2011 2012 2013 2014 2015 2016 .0 .2 .4 .6 .8 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 2.6 .0 .2 .4 .6 .8 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 2.6

QE1

QE2

QE3 & QE4

FED’S

ASSETS*

(trillion dollars)

Agency Debt + MBS

US Treasury Securities

Note: QE1 (announced 11/25/08) = Fed buys $1.24tn in mortgage securities. QE2 (announced 11/3/10) = Fed buys $600bn in Treasuries.

QE3 (announced 9/13/12) = Fed buys $40bn/month in mortgage securities (to infinity and beyond). QE4 (announced 12/12/12) = Fed buys $45bn/month in Treasuries.

* Average of daily figures for weeks ending Wednesday.

Source: Federal Reserve Board.

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Figure 4.

Fed Assets

Figure 5.

2009 2010 2011 2012 2013 2014 2015 2016 -50

0 50 100 150 200 250 300

-50 0 50 100 150 200 250 300

Jul

FED NET PURCHASES OF US TREASURY & US AGENCY BONDS + MBS

(monthly change, billion dollars)

2009 2010 2011 2012 2013 2014 2015 2016 -50

0 50 100 150

-50 0 50 100 150

Jul

FED NET PURCHASES OF US TREASURY BONDS

2009 2010 2011 2012 2013 2014 2015 2016

-50 0 50 100 150 200

-50 0 50 100 150 200

Jul

FED NET PURCHASES OF US AGENCY BONDS + MBS

Source: Federal Reserve Board.

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2008 2009 2010 2011 2012 2013 2014 2015 2016 0 200 400 600 800

0 200 400 600 800

Jul

FEDERAL RESERVE REPO BALANCES

(monthly change, thousands, sa)

Source: Federal Reserve.

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Figure 6.

Federal Reserve Repo Balances

Figure 7.

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 1200 1400 1600 1800 2000 2200 2400 2600 2800 3000 3200 3400 8/5

TOTAL ASSETS

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 0 200 400 600 800 1000 1200 1400 8/5

SELECTED LIABILITIES

Euro Area Credit Institutions in Euro

Deposit Facility

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 350 450 550 650 750 850 950 1050 1150 1250 1350 8/5

Lending to Euro Area Credit Institutions in Euro

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 40 100 160 220 280 340 400 8/5

Liabilities to Other Euro Area Residents in Euro

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 0 500 1000 1500 2000 8/5

Securities of Euro Area Residents in Euro General Govt Debt Denominated in Euro

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 600 800 1000 1200 8/5 Bank Notes in Circulation

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 0 200 400 600 800 8/5

Claims on Euro Area Residents in

Foreign Currency Foreign Reserves Including Gold

Source: European Central Bank.

* Total liabilities minus sum of lending to euro area credit institutions in euro, liabilities to other euro area residents in euro, and bank notes in circulation. 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 400

500 600 700 800 900 1000 1100 8/5 Miscellaneous Liabilities* yardeni.com

89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 0 100 200 300

0 100 200 300

Z

Jul

Note: Blue shade is Quantitative Easing Policy. Z = Zero Interest Rate Policy.

JAPAN: RESERVE BALANCES

AT BOJ

(trillion yen, reserve adjusted)

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Source: Bank of Japan.

Figure 8.

89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 -2 0 2 4 6 8 10

-2 0 2 4 6 8 10

8/12

JAPAN: INTEREST RATES

(percent, weekly)

10-Year Government Bond Yield (-0.11) Bank of Japan Overnight Rate (-0.05)

Note: Blue shade is Quantitative Easing Policy. Z = Zero Interest Rate Policy.

Source: Bank of Japan.

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Figure 9.

Bank of Japan

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 .2 .7 1.2 1.7 2.2 2.7 3.2 3.7 4.2 4.7 5.2 5.7 6.2

.2 .7 1.2 1.7 2.2 2.7 3.2 3.7 4.2 4.7 5.2 5.7 6.2

Jun

PBOC ASSETS

(trillion dollars, nsa, ratio scale)

Total Assets (5.1)

Foreign Exchange Assets (3.6) Nongold International Reserves Held by China (IMF data) (3.2)

Source: People’s Bank of China and IMF.

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Figure 10.

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 35 40 45 50 55 60 65 70 75 80 85

35 40 45 50 55 60 65 70 75 80 85

Jun

PBOC ASSETS

(percent)

Foreign Exchange Held/Total PBOC Assets

Source: People’s Bank of China and IMF.

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Figure 11.

2008 2009 2010 2011 2012 2013 2014 2015 2016 400 600 800 1000 1200 1400 1600 1800 2000 2200 2400 2600 2800 3000 3200 3400

400 600 800 1000 1200 1400 1600 1800 2000 2200 2400 2600 2800 3000 3200 3400

8/10

US TREASURIES HELD BY FED & FOREIGN OFFICIAL ACCOUNTS

(billion dollars)

Held by Fed Foreign Official Dollar Reserves*

Source: Federal Reserve Board, Table H.4.1.

* Held by foreign official institutions at the Fed. Average of week ending Wednesday.

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Figure 12.

2008 2009 2010 2011 2012 2013 2014 2015 2016 5 505 1005 1505 2005

5 505 1005 1505 2005

5/25

US AGENCIES HELD BY FED & FOREIGN OFFICIAL ACCOUNTS

(billion dollars)

Held by Fed (1776.3)

Foreign Official Dollar Reserves* (265.7)

Source: Federal Reserve Board, Table H.4.1.

* Held by foreign official institutions at the Fed. Average of week ending Wednesday.

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Figure 13.

US Treasuries & Agencies Held by Central Banks

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