The Federal Reserve will remain the top holder of U.S. Treasuries for the forese...
WASHINGTON - The Federal Reserve will remain the top holder of U.S. Treasuries for the foreseeable future after the central bank said it would stop shrinking its $4 trillion balance sheet by the end of September.
Today, Treasuries account for just 55 percent of the assets on the Fed’s balance sheet. The other big chunk is MBS at about 40 percent. The remainder is a hodge-podge of other assets, including gold.But not all Treasuries are the same. These securities range in maturity from 1-month bills to 30-year bonds, and the Fed has held a different mix of these over time.
Before the crisis, for instance, notes maturing between five and 10 years accounted for just 7 percent of the Fed’s Treasury holdings, and the longest-term securities, maturing in 10 years or more, were around 10 percent of that portfolio. In his press conference detailing the Fed’s plans for its balance sheet over the long term, Fed Chairman Jerome Powell said he would like to see the overall balance sheet continue to shrink a bit more relative to the U.S. economy.
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