Now, we wait and watch.
* * * * * J B K * * * * *
San Francisco
Jan. 21 (Bloomberg) -- The Federal Reserve's balance sheet fell 1.7 percent over the past week to $2.26 trillion, as lending to commercial banks declined.
The central bank's total assets dropped by $39.8 billion as of yesterday, the Fed said today in a weekly statement. Credit extended to banks through the Term Auction Facility credit program declined by $37.4 billion to $38.5 billion.
The Federal Open Market Committee, after a meeting on Dec. 15-16, announced plans to close several emergency liquidity programs by Feb. 1.
The Fed is allowing the emergency programs to wind down "in light of ongoing improvements in the functioning of financial markets," according to its Dec. 16 statement.
The central bank's holdings of mortgage-backed securities increased by $2.31 billion to $970.9 billion. Federal agency debt gained $1.37 billion to $162.2 billion.
The increase in the balance sheet resulting from purchases of mortgage-backed securities and federal agency debt was offset this week by the decline in liquidity programs.
http://www.bloomberg.com/apps/news?pid=20601068&sid=a7XQZN3W9B_g
