LIBERTY STREET ECONOMICS
A New Reserves Regime? COVID-19 and the Federal Reserve Balance Sheet
Gara Afonso, Marco Cipriani, Gabriele La Spada, and Will Riordan
In response to the COVID-19 pandemic, the Federal Reserve dramatically expanded its balance sheet, both directly, through outright purchases and repurchase agreements, and indirectly, as a consequence of the facilities that were launched to support market functioning and the flow of credit to the real economy. The authors characterize the increase in reserves between March and June 2020, describing changes to the distribution and concentration of reserves.
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