As we approach the #FOMC meeting on June 14-15th, and await the #ratehike decision, it’s also very important to track the #Fed balance sheet reduction. As you can see in the chart below, the #federalreserve owns no less than 25% of the outstanding #ustreasury supply of every maturity bucket from 3-30 yrs. It’s important to note that holdings have increased in every bucket over the last 3 years with the exception of the 6-10. The fed intervention is particularly acute on the 10-30 yrs, where it owns 38% of the long bonds. Who will buy those bonds if the fed retreats?
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Source: FRBoNY
