The Fed’s Balance Sheet Reduction (QT) Update

The Fed did little on the Treasury front this week but tightened its mortgage position. The Fed gave birth to the housing bubble and perhaps the Fed has finally decided to blow it up. It would be fascinating to watch the Fed aggressively pare back its mortgage holdings. However, I do not see that happening in an election year or any year for that matter.

• Treasuries: The Fed’s Treasury security holdings declined by $50.0 million for the week-ended February 28th and declined by $31.0 billion on a rolling 4-week basis.

• Agencies: The Fed’s Government Agency security holdings declined by $11.0 billion for the week-ended February 28th and declined by $13.9 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: HERE.

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