Federal Reserve Weekly SOMA Update

First, the Fed will lower its overnight rate in September. Next, should the economy slip into recession (it’s already there, it’s just that CPI / GDP deflator is woefully understated), the Fed will continue to lower while buying Treasuries at auction. The Government subsidizing itself. How ironic.

• Treasuries: The Fed’s Treasury position decreased by $50 million for the week-ended September 10th. The Fed reduced its Treasury position by $5.0 billion on a rolling 4-week basis.

• Agencies: The Fed’s Government Agency position was unchanged for the week-ended September 10th (for the second week in a row). The Fed’s Government Agency holdings decreased by $17.8 billion on a rolling 4-week basis.

• The Fed’s balance sheet holdings: https://www.newyorkfed.org/markets/soma-holdings