(i) Graph: upload the total reserve balances maintained at the Fed, (FRED code = RESBALNS) from the beginning of 2007 on. Then plot a second series, non-seasonally adjusted currency in circulation (FRED code = CURRCIR), by using the “Add Line” function., making sure the two series both run from the beginning of 2007 to the present. Attach graph.
ii) By what factor has the level of bank reserves increased from December 2007 to its highest point over the past 10 years?
(i) Why has it been declining since the mid 2010s?
(ii) What is the October 2018 value of excess reserves?
(b) What is Fed purchases of mortgage-backed securities and long-term mortgage rates?
(i) Graph: Access the impact of targeted asset purchases of the Fed by plotting on the left scale a monthly (not weekly) basis since January 2008 the Federal Reserve’s holdings of mortgage-backed securities (FRED code: WSHOMCB). Plot on the right scale the average (monthly) yield on 30-year fixed mortgages (FRED code: MORTGAGE30US since January 2007 by using “Edit/Add Line.” attach graph.
(ii) So how might these purchases have supported both the housing market and the banking system?
(iii) What is the value of the October 2018 average fixed-rate mortgage rate?