The Fed continued with its modest tightening program, reducing its Treasury position by approximately $29 billion over the past week and by $72 billion on a rolling 4-week basis. However, the Fed’s Balance Sheet has barely unwound the Fed’s enormous inflation of the money supply (2020-2022) as depicted in the chart below.

• Treasuries: The Fed’s Treasury security holdings decreased by $28.9 billion the week-ended May 17th and were reduced by $72.3 billion on a rolling 4-week basis.
• Agencies: The Fed’s Government Agency security holdings decreased by $1.4 billion over the same period and were reduced by $18.6 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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