The Fed’s Balance Sheet Reduction (QT) Update

The Fed’s Balance Sheet Reduction (QT) Update

The Fed’s Treasury holdings are essentially unchanged from the prior week. Meanwhile, the Fed allowed approximately $15 billion of mortgage-backed securities to roll off of its balance sheet, the second time in five weeks the Fed has had that level of MBS activity. Good. The Fed blew the housing bubble and needs to unwind it. Remove the excess liquidity from the system as quickly as possible to allow assets to find true equilibrium.

  • Treasuries: The Fed’s Treasury security holdings declined by $2.8 billion for the week-ended September 27th and decreased by $49.6 billion on a rolling 4-week basis.
  • Agencies: The Fed’s Government Agency security holdings declined by $14.7 billion for the week-ended September 27th and decreased by $19.1 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.