The Fed’s Balance Sheet Reduction (QT) Update
The Fed continues to plod along with its modest QT program. This autumn the Fed will likely be required to absorb Treasury debt as Treasury runs auctions to plug the approximate $2 Trillion fiscal deficit for the year-ending September 30th 2024. We may see the 10-year Treasury yield lift even as the U.S. economy softens. How’s that for a new wrinkle?
Treasuries: The Fed’s Treasury security holdings declined by $16.0 billion for the week-ended July 3rd and 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 July 3rd and declined by $18.7 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.
