The Fed’s Balance Sheet Reduction (QT) Update
The Fed ramped its QT effort this past week. Soon the Fed will be a Buyer of Treasury securities as Yellen & Company increase Treasury auction activity and fiscal spending. These short-term fiscal funding bills are devaluing the Dollar and adding to the United States’ enormous debt burden ($34 Trillion and counting). There are no fiscal conservatives in leadership positions in Washington. House Speaker Mike Johnson is bending over every time he moves one of these outrageous short-term spending bills forward. It is highly preferable to shut down the Federal Government rather than pass these pork-filled, spend-heavy bills. A $3.5 Trillion fiscal deficit in fiscal 2024 is realistic. That fiscal hole will have to be plugged with more money printing. Printing begats printing.
Treasuries: The Fed’s Treasury security holdings declined by $29.4 billion for the week-ended January 31st and declined by $72.7 billion on a rolling 4-week basis.
Agencies: The Fed’s Government Agency security holdings declined by $11.5 billion for the week-ended January 31st and declined by $14.6 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: HERE.
