Federal Reserve Weekly SOMA Update
The Fed’s balance sheet is static, which means a certain level of Dollar devaluation will take place given the United States’ fractional reserve banking system. I believe that even if the Fed was to lower Fed Funds tomorrow, the 10YR yield will work its way higher this year given Trump and the GOP said “Yes” to the March continuing resolution, locking in a $2.0-2.5 Trillion deficit for FY’25. Yield curve control by the Fed will follow. The U.S. let the Government interventionist genie out of the bottle in 2008’s financial crisis. Paulson, Geithner, Lew, Mnuchin, Yellen, Bessent, Bernanke, Yellen (a double offender), and Powell - what a run. This gang of eight has never hesitated to devalue the Dollar through profligate spending and interventionist fiscal and monetary policy.
Treasuries: The Fed’s Treasury holdings were unchanged for the week-ended April 23rd. The Fed’s Treasury holdings declined by $19.5 billion on a rolling 4-week basis.
Agencies: The Fed’s Government Agency security holdings declined by $3.5 billion for the week-ended April 23rd. The Fed’s Government Agency holdings declined by $3.6 billion on a rolling 4-week basis.
The Fed’s balance sheet holdings: https://www.newyorkfed.org/markets/soma-holdings
Excel file: Our Excel file detailing the Fed’s holdings of Treasury and Agency securities over time: HERE.
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