The Fed modestly reduced its Treasury and Agency security holdings. The 2-Year Treasury yield sits at 4.89%, its highest level since June 2007. The 10-Year Treasury yield sits at 4.08% (we told you it had upside and there is lots more room to move higher), it’s highest level since November 2022. Yields will move higher as the Fed continues to tighten policy. EU inflation was up today as we wrote earlier and we expect higher prices to persist in the U.S. as well.

• Treasuries: The Fed’s Treasury security holdings decreased by $28.0 billion over the last week and decreased by $60.0 billion on a rolling 4-week total basis.
• Agencies: The Fed’s Government Agency security holdings decreased by $10.2 billion over the last week and by $14.7 billion on a rolling 4-week total 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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