The Fed’s Balance Sheet Reduction (QT) Update
Ironically, as we write about the Fed today August 15th, it was on this day in 1971 that then President Nixon took the United States off the Gold Standard (the U.S. Dollar has lost 98% of its value versus gold since that date). The Fed has pared its total SOMA holdings by $1.8 Trillion during the QT period that began in 2022 through today. This is after the Fed grew its balance sheet by $5 Trillion from January 2020 - April 2022 (the peak). QT has been a muted effort to put it kindly.
Treasuries: The Fed’s Treasury security holdings were unchanged for the week-ended August 14th. The Fed’s Treasury holdings declined by $10.3 billion on a rolling 4-week basis.
Agencies: The Fed’s Government Agency security holdings declined by $66.5 million for the week-ended August 14th and declined by $17.8 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.
