QT Continues Apace

The Fed continues to shrink its balance sheet, at least on the Treasuries side, dropping to $4.7 Trillion as of February 14th, 2024. That's about $95 billion a month. That's still quite aways to go to reach the level before the Great Covid Liftoff on January 22nd, 2020, where it stood at $2.38 Trillion. By April of the same year, that figure ballooned to $3.97 Trillion.

The Fed may slow down this pace when they meet in March.

As mentioned before, the shrinkage in Mortgage Backed Securities will continue at a more muted pace, as current pricing makes selling them off problematical. Since a great deal of the Fed's Treasury hoard is short dated, it can just let them roll off.

2/20/2024