Much of the increase in the Feds assets has come in the form of U.S. Treasury securities and Freddie Mac and Fannie Mae mortgage-backed securities that the Fed purchased over the last five years in its attempts to stimulate the economy. As of Feb. 1, 2006, when Bernanke took over as chairman, the Feds balance sheet indicated it owned $748,840,000,000 in U.S. Treasury securities. At that time, the balance sheet listed no mortgage-backed securities. As of Jan. 29, 2013, the balance sheet indicated the Fed owned $2,243,176,000,000 in U.S. Treasury securities and $1,532,224,000,000 in mortgage-backed securities.
The Fed announced its first round of quantitative easing on March 18, 2009. The Fed judged that the economy, which remained in a recession at that point, still needed this stimulus, said a reportFederal Reserve:Unconventional Monetary Policy Optionspublished by the Congressional Research Service in 2013. On March 18, 2009, the Fed announced a commitment to purchase $300 billion of Treasury securities, $200 billion of agency debt, and $1.25 trillion of agency mortgage-backed securities in 2009, said CRS. In September 2009, the Fed announced that it would complete those purchases by the first quarter of 2010. In November 2009, it announced that it would purchase only $175 billion of agency debt due to the limited availability of those securities.
Dissatisfied with the slow pace of the economic expansion, the Fed announced on November 3, 2010, that it would further increase the size of its balance sheet by purchasing an additional $600 billion of Treasury securities at a pace of about $75 billion per month, a process which was completed by the end of June 2011, said CRS. This announcement was popularly referred to as QEII. During and after QEII, the Fed announced it would continue the practice of replacing maturing securities with Treasury security purchases.
On September 13, 2012, the Fed announced concern that 'without further policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions..... (and) inflation over the medium term likely would run at or below its 2 percent objective, said CRS. For those reasons, it announced that it would restart large-scale asset purchases, pledging to purchase $40 billion of agency MBS per month (popularly referred to as 'QEIII'). Unlike the previous two rounds of asset purchases, the Fed specified no planned end date to its purchases, instead pledging to continue purchases until labor markets improved substantially, in a context of price stability.