Re:Nobody wants U.S. Treasury bonds
by arcticbull on Tuesday November 28, 2023 @06:21PM
(#38453018)
> Meanwhile, the Federal Reserve is selling down its own holdings, dumping yet more bonds into a market that doesn’t really want them.
That's not my understanding. The Fed is allowing bonds to mature and roll off the balance sheet - without replacing them - but I don't believe they're selling them on the market.
> In response to inflation running well above its long-run target, the Fed began unwinding its accommodative monetary policy this year. This entailed ending QE in March and then beginning QT in June. When QE ended, the Fed reinvested any maturing securities to maintain the size of its balance sheet. With QT, the Fed stopped reinvesting up to $30 billion in maturing Treasuries and $17.5 billion in maturing MBS every month, passively shrinking its assets as those securities "roll off" without being replaced. [1]
That's not my understanding. The Fed is allowing bonds to mature and roll off the balance sheet - without replacing them - but I don't believe they're selling them on the market.
> In response to inflation running well above its long-run target, the Fed began unwinding its accommodative monetary policy this year. This entailed ending QE in March and then beginning QT in June. When QE ended, the Fed reinvested any maturing securities to maintain the size of its balance sheet. With QT, the Fed stopped reinvesting up to $30 billion in maturing Treasuries and $17.5 billion in maturing MBS every month, passively shrinking its assets as those securities "roll off" without being replaced. [1]
[1] https://www.richmondfed.org/publications/research/econ_focus... (Q3 2022)