TEK2day

Operating at the Intersection of Technology and the Capital Markets

    Tag: quantitative tightening

    • The Fed’s Balance Sheet Reduction (QT) Update

      The Fed reduced its Treasury and Government Agency security holdings by $32.9 billion over the week ended November 30th. The Fed has reduced its balance sheet holdings by $79.7 billion over the last 4 weeks.

    • The Fed’s Balance Sheet Reduction (QT) Update

      The Fed reduced its Treasury and Government Agency security holdings by $4.8 billion over the week-ended November 23rd – essentially no change. The Fed has reduced its balance sheet holdings by $80.7 billion over the last 4 weeks as it modestly tightens monetary policy by shrinking the money supply (QT) and raising its Fed Funds…

    • The Fed’s Balance Sheet Reduction (QT) Update

      The Fed reduced its Treasury and Government Agency security holdings by $42.1 billion over the week-ended November 16th as it allows balance sheet holdings to mature. The Fed has reduced its balance sheet holdings by $99.2 billion over the last 4 weeks as it tightens monetary policy by shrinking the money supply (QT) and raising…

    • The Fed’s Balance Sheet Reduction (QT) Update

      The Fed’s balance sheet modestly expanded during the week ended November 9th – which explains why Treasury yields were flat to down along the yield curve over the same period. The Fed’s Treasury and Agency security holdings increased by a combined total of approximately $26 million over the past week ($25 million Treasury holdings increase…

    • The Fed’s Balance Sheet Reduction (QT) Update

      The Fed’s balance sheet runoff reduced the Fed’s Treasury and Agency security holdings by a combined total of approximately $33.8 billion over the past week (week ended November 2nd), and a reduction of approximately $78.5 billion on a rolling 4-week total basis. The Fed reduced its balance sheet by $243.9 billion since QT began in…

    • The Fed’s Balance Sheet Reduction (QT) Update

      The Fed’s balance sheet runoff reduced the Fed’s Treasury and Agency security holdings by a combined total of approximately $23.3 billion over the past week (week ended October 26th), and a reduction of approximately $82.6 billion on a rolling 4-week total basis. Fed Balance Sheet – Treasuries: The Fed’s Treasury security holdings were approximately $3.2…

    • The Fed’s Balance Sheet Reduction (QT) Update

      The Fed’s balance sheet runoff occurred at a muted pace this week. Approximately $4 billion of Treasuries matured while there was no change to the Fed’s Government Agency holdings. The Fed’s Treasury holdings were approximately $4.0 billion lower over the past week and $57.1 billion lower on a rolling 4-week total basis. The Fed’s Government…

    • $95 Billion Per Month In QT Is A High Bar

      The Fed was to have achieved a $95 billion per month Balance Sheet reduction run rate by September ($60 billion of Treasury securities and $35 billion of mortgage-backed securities). The culling of $60 billion in Treasuries per month is going to be difficult to execute. The Treasury market lacks liquidity as evidenced by the sharp…

    • How The Fed’s Balance Sheet Has Changed

      We detail changes in the Fed’s Balance Sheet since May 2022 as the Fed has embarked on its QT program (which has yet to kick into high gear). QT ramps up this month. Approximately $92 billion of Treasury securities have been pared from the Fed’s Balance Sheet since May 4th 2022. Approximately $6 billion of…

    • QT Has Yet To Kick In Yet Yields Have Moved

      Once the Fed fully ramps its QT effort logic suggests that Treasury yields will climb higher as it is unlikely that a buyer(s) exist to offset the Fed’s Balance Sheet runoff. Thus, Treasury prices are likely to fall and yields will climb. Risk assets are likely to decline in value during this QT period. The…