The Fed’s Balance Sheet Reduction (QT) Update

The Fed picked up the pace of QT this week but the QT effort pales in comparison to the Fed’s QE program of 2020-May 2022. It appears the Fed’s Discount window will be the new backdoor QE program once the BTFP bailout expires on March 11th.

• Treasuries: The Fed’s Treasury security holdings declined by $31.0 billion for the week-ended February 21st and declined by $60.3 billion on a rolling 4-week basis.

• Agencies: The Fed’s Government Agency security holdings declined by $3.0 billion for the week-ended February 21st and declined by $14.4 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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