Fed balance sheet below $7 trillion, repo drops to zero for first time since September

• The U.S. Federal Reserve’s holdings of bonds and other assets shrank for a fourth straight week, sliding below $7 trillion, and use of one key emergency liquidity measure dropped to zero in the latest sign that financial stresses that erupted early in the coronavirus pandemic have eased.
• The Fed’s total balance sheet size declined by about $88 billion to $6.97 trillion as of July 8 versus $7.06 trillion a week earlier, data released on Thursday by the central bank showed.
• It was the largest weekly drop in more than 11 years, and the main driver was the balance of outstanding repurchase agreements - or repos - which fell to zero from $61.2 billion a week earlier. It was the first time in 10 months that banks have not tapped the Fed for this key source of short-term funding.

 (Source: Reuters)