The Fed’s balance sheet contracted for the second straight week, dipping slightly to $2.120 trillion from $2.123 trillion. Nearly all of the drop came from a decline in central bank liquidity swaps, as foreign demand for dollars continues to wane. Nearly all of the programs set up as emergency facilities to prop up the financial system were essentially flat. Direct-bank lending rose a bit, but remains at low levels compared to a year earlier. The Fed expanded its purchases of Treasurys and agency debt, though its holdings of mortgage-backed securities declined for the second straight week. The Fed started a program in March to ramp up such acquisitions in order to keep long-term interest rates low. The central bank announced in August that it will be buying more Treasurys through the end of October, and said last month that it will be buying MBS into 2010.

In an effort to track the Fed’s actions, Real Time Economics has created an interactive graphic that will mark the expansion of the central bank’s balance sheet. Every Thursday afternoon or soon after, the chart will be updated with the latest data released by the Fed.

Click Continue Reading to see an interactive chart.