The Fed’s Balance Sheet Reduction (QT) Update
The Fed ought to radically accelerate its QT effort if it in fact plans to hold its Fed Funds Rate steady as prices continue to increase. If the Fed chooses to do nothing as CPI remains elevated, long-term yields will continue to work their way higher driven by market forces.
Treasuries: The Fed’s Treasury security holdings declined by $2.4 billion for the week-ended October 11th and declined by $55.2 billion on a rolling 4-week basis.
Agencies: The Fed’s Government Agency security holdings were unchanged for the week-ended October 11th (the second consecutive week of unchanged holdings), and declined by $19.1 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.
Related YouTube video HERE.
