The Fed’s Balance Sheet Reduction (QT) Update
It is likely that the Fed will slow the pace of QT by June, which will be the Fed’s next policy mistake. The Fed ought to allow the market to set its Fed Funds rate while the Fed focuses on removing the excess liquidity it created (April 2020-May 2022) from the system.
Treasuries: The Fed’s Treasury security holdings were unchanged for the week-ended April 24th and declined by $78.5 billion on a rolling 4-week basis.
Agencies: The Fed’s Government Agency security holdings declined by $3.5 billion the week-ended April 24th and declined by $3.7 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.
