Securities Held Outright by the Fed

Think of it this way

It is the complete inventory of the pantry. What tells you whether someone is doing the big grocery run or just restocking what runs out is not how much there is, but what came in this week.

What is Securities Held Outright by the Fed?

The sum of all the securities the Federal Reserve holds outright: bills, notes, bonds, inflation-linked debt and mortgage-backed securities. It is published every Wednesday in the weekly H.4.1 report. It is here as a denominator: subtracting bills leaves the long-term part, which is what distinguishes a stimulus program from a maintenance purchase.

How to read Securities Held Outright by the Fed

It is not read by its level, which grows with the economy, but by its composition. Lag: none.

What Securities Held Outright by the Fed means for the market

Indirect: what matters is what it reveals about what the Fed is buying, not the figure itself.

Where the money flows

Every security included in this figure was paid for with money the Fed created when it bought it, and that money stayed in the account of whoever sold it. When a security matures and is not replaced, the path runs in reverse and the money disappears.

What to watch in Securities Held Outright by the Fed

Look at it only alongside bills: the difference between the two is what counts.

The total debt the Fed has bought.