The Fed’s Balance Sheet Reduction (QT) Update

The Fed continued its weak QT effort. Go big or go home Jerome.

• Treasuries: The Fed’s Treasury security holdings declined by $9.0 billion for the week-ended March 20th and declined by $42.5 billion on a rolling 4-week basis. Recall that the Fed purchased $120.0 billion of securities ($90.0 billion of Treasuries and $30.0 billion of mortgage securities) per month during its 2020-2022 COVID response. Good luck unwinding that egregious monetary excess at this snail-like pace.

• Agencies: The Fed’s Government Agency security holdings declined by $3.2 billion the week-ended March 20th and declined by $14.2 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.

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