The Fed’s Balance Sheet Reduction (QT) Update

The Fed trimmed its mortgage position by $3.3 billion and grew its Treasury holdings by $50 million. The Fed is no longer running a modest QT program in my view. The 10-year Treasury yield recognizes the Fed’s loose policy.

• Treasuries: The Fed’s Treasury holdings grew by $50 million for the week-ended December 24th. The Fed’s Treasury holdings declined by $14.7 billion on a rolling 4-week basis.

• Agencies: The Fed’s Government Agency security holdings declined by $3.3 billion for the week-ended December 24th. The Fed’s Government Agency holdings declined by $3.5 billion on a rolling 4-week basis.

• The Fed’s balance sheet holdings: https://www.newyorkfed.org/markets/soma-holdings

Source: Federal Reserve; TEK2day