Some Charts Ahead of the June 10th Fed Meeting

Markets are eagerly awaiting the results of the next FOMC meeting, which are scheduled to be released on June 10th at 2:00 PM Eastern. The Federal Reserve has provided record amounts of monetary stimulus over the past three months, and they can claim a good deal of the credit for the rebound in asset prices. Traders and investors will be hungry for clues about the Fed’s eagerness for future monetary accommodation.

The magnitude of monetary accommodation is portraying in the expansion of the Fed’s balance sheet. The balance sheet is still growing, though at a decreasing rate. It is not clear whether investors are more focused on whether the balance sheet is growing or the rate at which it is growing. To put things in perspective, I offer the following charts:

We can see here that the rate of increase is positive, but slowing. However, that growth rate has declined “only” to the rate we saw last autumn when the Fed intervened in repo markets:

(Click on image to enlarge)

Source of Data: Bloomberg

When we look at a longer-term chart, we can see how extraordinary that growth was at the time. It has been dwarfed recently, of course:

(Click on image to enlarge)

Source of Data: Bloomberg

For those of you who prefer the changes in absolute terms, here they are:

(Click on image to enlarge)

Source of Data: Bloomberg

(Click on image to enlarge)

Source of Data: Bloomberg