The Fed’s Balance Sheet Reduction (QT) Update

The Fed took the week off as it relates to the Treasury market as the 10-year Treasury yield continued to rise. The Fed was somewhat active on the mortgage side. The Fed has reduced its mortgage holdings by $433 billion during the 2H 2022-present day period. This after creating the housing bubble by purchasing $30 billion of mortgage-related assets per month (approximately $840 billion of purchases from early 2020-May 2022). The Fed would serve the country well by getting out of the way and stopping its interventionist behavior.

• Treasuries: The Fed’s Treasury security holdings were unchanged for the week-ended September 25th. The Fed’s Treasury holdings declined by $15.1 billion on a rolling 4-week basis.

• Agencies: The Fed’s Government Agency security holdings declined by $17.7 billion for the week-ended September 25th and declined by $17.7 billion on a rolling 4-week basis.

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