Money&Banking Week 5.docx - Since the 2007 financial crisis...

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Since the 2007 financial crisis the Fed’s portfolio of Treasury and mortgage-backed securities has grown tremendously, from $900 billion to more than $7 trillion today. In recent years there has been much discussion about how and how quickly the Fed may begin reducing the size of its balance sheet. What is the Fed’s balance sheet? What’s your take? Should the balance sheet be smaller? It is known that the balance sheet consists of the assets and liabilities of the company. Usually, the Fed’s assets consist of government securities and loan extended to members’ bank through the repo and discount window. The public will always be connected to the Fed’s balance sheet, since we are all part of the economy. The currency notes the public holds, are reported as liabilities for the Fed. In other words, the Fed balance sheet is a report that presents the factors that affect expenses and profits, which affects both the supply and demand of the Federal Reserve Funds. This report also shows different means the

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