As I expected, the Federal Reserve did release their December balance sheet this week. I have updated the Easing Program graph with the latest numbers. Since I watch the weekly releases, I did notice in increase in the size of excess reserves. The amount increased from $2.519 trillion in November to $2.606 trillion in December. In December 2013, the amount was $2.485 trillion. This level supports my desire to see targeted interest rates increase in March. While the Federal Funds rate did increase to 0.12% in December, I would prefer to see it at 0.25% in March.
As I have stated previously, I would prefer to see the level of excess reserves maintained until targeted interest rates have normalized. The length of the financial repression that has taken place is excessively long and needs to end.