The Federal Reserve operates with a sizable balance sheet that includes a large number of distinct assets and liabilities. The Federal Reserve's balance sheet contains a great deal of information about the scale and scope of its operations.
What does the Fed's balance sheet show?
Like any balance sheet, the Fed's shows its assets and liabilities. The Fed discloses it weekly in Table 5 of its H.4.1 report. The Fed's assets consist primarily of U.S. Treasury notes and bonds and agency mortgage-backed securities.
Why does the Federal Reserve have a large balance sheet?
Since the Federal Reserve has an unlimited supply of currency for asset purchases, the size of its balance sheet is constrained primarily by the availability of eligible assets as well as practical considerations of politics and policy. Traditionally, the Fed's assets have mainly consisted of U.S. Treasury securities.
