<h1>Total assets on the Fed balance sheet</h1>
<p>The FRED site has graphs for total assets of the Fed balance sheet:</p>
<p><a href="https://fred.stlouisfed.org/series/walcl" rel="nofollow noreferrer">https://fred.stlouisfed.org/series/walcl</a></p>
<p><a href="https://i.sstatic.net/k29Uj.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/k29Uj.png" alt="enter image description here" /></a></p>
<h1>Capital</h1>
<p>It also has a graph for total capital on the Fed balance sheet:</p>
<p><a href="https://fred.stlouisfed.org/series/WCTCL" rel="nofollow noreferrer">https://fred.stlouisfed.org/series/WCTCL</a></p>
<p><a href="https://i.sstatic.net/WtYnT.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/WtYnT.png" alt="enter image description here" /></a></p>
<h1>Leverage ratio</h1>
<p>Leverage ratio is <code>assets/capital</code>. FRED actually lets you combine data sets using arithmetic operations. So let's graph <code>assets/capital</code>:</p>
<p><a href="https://fred.stlouisfed.org/graph/?g=SggO" rel="nofollow noreferrer">https://fred.stlouisfed.org/graph/?g=SggO</a></p>
<p><a href="https://i.sstatic.net/xxRQG.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/xxRQG.png" alt="enter image description here" /></a></p>
<p>As you can see, the leverage ratio as of July 2022 is 213.</p>

CC BY-SA 4.0
2022-07-29T10:14:46.540Z
2022-07-29T10:14:46.540Z
dharmatech
<p>Page 4 of this document has the balance sheet as of November 2015: <a href="http://www.federalreserve.gov/monetarypolicy/files/quarterly_balance_sheet_developments_report_201511.pdf" rel="nofollow">http://www.federalreserve.gov/monetarypolicy/files/quarterly_balance_sheet_developments_report_201511.pdf</a></p>

<p>Their assets are 4489 liabilities are 4431. Thus Equity is 58, L/E = 76 (approx).</p>

<p>It would not matter even if Fed had infinite leverage ratio. However, as far as I know congress has agreed to keep Fed solvent (so the ratio can't go negative). Although, the institution is not even solvent, as some of it's assets are marked mark to model, thus having much lower fair value than presented in the balance sheet.</p>

<p>The balance sheet reflects created money (growth in base money) and not debt. Created money generates inflation, but significant amount of bank credit was destroyed which also constituted money people transacted with. Thus the newly created Fed money has just replaced the bank credit and there has been no significant inflation, as the M2 money supply has only raised slightly. Some of the currency has also been exported overseas as USA continues to have a balance of payment / trade deficits.</p>

<p>Based on the quote, it seems the author has confused two issues. If you want to investigate the debt and liabilities of the government, you need to look at the government debt and it's other liabilities (not merely the Fed). He is correct that the debt is at a quite high historical level (only during world war 2 was it higher), while other liabilities (such as social security and medicare liabilities) I believe are at an unprecedented historical level.</p>

CC BY-SA 3.0
2016-01-03T18:41:18.567Z
Minor PDF tip...if you list the page number at the end of the url followed by a hash, it will jump straight to it: http://www.federalreserve.gov/monetarypolicy/files/quarterly_balance_sheet_developments_report_201511.pdf#12
user2662680
CC BY-SA 3.0
2016-01-03T11:07:40.963Z
2016-01-03T12:03:10.100Z
2016-01-03T12:03:10.100Z
Dole
<p><a href="http://nymag.com/daily/intelligencer/2015/12/big-short-genius-says-another-crisis-is-coming.html?mid=twitter-share-di" rel="nofollow">http://nymag.com/daily/intelligencer/2015/12/big-short-genius-says-another-crisis-is-coming.html?mid=twitter-share-di</a></p>

<blockquote>
  <p>What makes you most nervous about the future? Debt. The idea that
  growth will remedy our debts is so addictive for politicians, but the
  citizens end up paying the price. The public sector has really stepped
  up as a consumer of debt. <strong>The Federal Reserve’s balance sheet is
  leveraged 77:1</strong>. Like I said, the absurdity, it just befuddles me.</p>
</blockquote>

<p>How did Michael Burry arrive at the 77:1 figure? Is this close to reality? How could the Fed be leveraged when they can simply print money to pay down debt in the first place?</p>

CC BY-SA 3.0
2016-01-03T07:48:19.817Z
Possible duplicate of [What does the Federal Reserve intend to do with bonds it has purchased under QE?](http://economics.stackexchange.com/questions/9986/what-does-the-federal-reserve-intend-to-do-with-bonds-it-has-purchased-under-qe)
Giskard
CC BY-SA 3.0
2016-01-05T09:23:17.917Z
Apparently not a duplicate, this one is more structural than the other
VicAche
<debt><central-banking><government-debt><federal-reserve>
How much leverage has the Federal Reserve taken on today (Jan 2016)?
curious
# How much leverage has the Federal Reserve taken on today (Jan 2016)?

(Asked by: username_0 on 2016-01-03)

<http://nymag.com/daily/intelligencer/2015/12/big-short-genius-says-another-crisis-is-coming.html?mid=twitter-share-di>

> What makes you most nervous about the future? Debt. The idea that
> growth will remedy our debts is so addictive for politicians, but the
> citizens end up paying the price. The public sector has really stepped
> up as a consumer of debt. **The Federal Reserve’s balance sheet is
> leveraged 77:1**. Like I said, the absurdity, it just befuddles me.

How did Michael Burry arrive at the 77:1 figure? Is this close to reality? How could the Fed be leveraged when they can simply print money to pay down debt in the first place?

**Tags:** debt, central-banking, government-debt, federal-reserve
> **Comments:**
> **username_1**: Possible duplicate of [What does the Federal Reserve intend to do with bonds it has purchased under QE?](http://economics.stackexchange.com/questions/9986/what-does-the-federal-reserve-intend-to-do-with-bonds-it-has-purchased-under-qe)  
> **username_2**: Apparently not a duplicate, this one is more structural than the other  

---

## 2 answers

### Answer by username_4 on 2016-01-03. Score: 4 | Accepted answer

Page 4 of this document has the balance sheet as of November 2015: <http://www.federalreserve.gov/monetarypolicy/files/quarterly_balance_sheet_developments_report_201511.pdf>

Their assets are 4489 liabilities are 4431. Thus Equity is 58, L/E = 76 (approx).

It would not matter even if Fed had infinite leverage ratio. However, as far as I know congress has agreed to keep Fed solvent (so the ratio can't go negative). Although, the institution is not even solvent, as some of it's assets are marked mark to model, thus having much lower fair value than presented in the balance sheet.

The balance sheet reflects created money (growth in base money) and not debt. Created money generates inflation, but significant amount of bank credit was destroyed which also constituted money people transacted with. Thus the newly created Fed money has just replaced the bank credit and there has been no significant inflation, as the M2 money supply has only raised slightly. Some of the currency has also been exported overseas as USA continues to have a balance of payment / trade deficits.

Based on the quote, it seems the author has confused two issues. If you want to investigate the debt and liabilities of the government, you need to look at the government debt and it's other liabilities (not merely the Fed). He is correct that the debt is at a quite high historical level (only during world war 2 was it higher), while other liabilities (such as social security and medicare liabilities) I believe are at an unprecedented historical level.

> **Comments:**
> **username_5**: Minor PDF tip...if you list the page number at the end of the url followed by a hash, it will jump straight to it: http://www.federalreserve.gov/monetarypolicy/files/quarterly_balance_sheet_developments_report_201511.pdf#12  

---

### Answer by username_3 on 2022-07-29. Score: 0

# Total assets on the Fed balance sheet

The FRED site has graphs for total assets of the Fed balance sheet:

<https://fred.stlouisfed.org/series/walcl>

[![enter image description here](https://i.sstatic.net/k29Uj.png)](https://i.sstatic.net/k29Uj.png)

# Capital

It also has a graph for total capital on the Fed balance sheet:

<https://fred.stlouisfed.org/series/WCTCL>

[![enter image description here](https://i.sstatic.net/WtYnT.png)](https://i.sstatic.net/WtYnT.png)

# Leverage ratio

Leverage ratio is `assets/capital`. FRED actually lets you combine data sets using arithmetic operations. So let's graph `assets/capital`:

<https://fred.stlouisfed.org/graph/?g=SggO>

[![enter image description here](https://i.sstatic.net/xxRQG.png)](https://i.sstatic.net/xxRQG.png)

As you can see, the leverage ratio as of July 2022 is 213.


---

