The Fed’s Balance Sheet Reduction (QT) Update

$19 billion of Treasuries rolled off of the Fed’s balance sheet this week while the Fed’s mortgage position was unchanged. (See our historical Excel detail behind the paywall). I expect the Fed to cut its Fed Funds rate during its May 7th meeting as a result of recent market turmoil. This isn’t Paul Volcker’s Fed.

• Treasuries: The Fed’s Treasury holdings declined by $19.0 billion for the week-ended April 2nd. The Fed’s Treasury holdings declined by $25.0 billion on a rolling 4-week basis.

• Agencies: The Fed’s Government Agency security holdings were unchanged for the week-ended April 2nd. The Fed’s Government Agency holdings declined by $14.3 billion on a rolling 4-week basis.

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

Source: TEK2day; Federal Reserve