The Fed’s Balance Sheet Reduction (QT) Update

The Fed will never remove the excess liquidity from the system at this QT pace.

• Treasuries: The Fed’s Treasury security holdings declined by $2.9 billion for the week-ended March 27th and declined by $45.4 billion on a rolling 4-week basis. For comparison 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.

• Agencies: The Fed’s Government Agency security holdings declined by $11.6 billion the week-ended March 27th and declined by $14.8 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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