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IPFS News Link • Federal Reserve

The Fed Will Not Hit its Own Quantitative Tightening Schedule

• https://mishtalk.com, By Mish

On March 2, a New York Fed Study projected MBS principle payments based on its assessment of market rates. The above chart is from that study.

On May 4, the Fed announced a Statement Regarding Plans for Reducing SOMA Holdings of Treasury Securities, Agency Debt, and Agency Mortgage-Backed Securities. The following chart shows the expected QT.

Total Monthly Caps 

QT Cap Synopsis

The Fed placed $17.5 billion MBS caps for June-August and $35.0 billion thereafter.

The Fed placed $30.0 billion Treasury caps for June-August and $60.0 billion thereafter.

The Fed can easily hit its Treasury targets. It has a massive balance sheet of every duration for runoffs to work without actively selling anything. 

MBS is another matter and the results speak for themselves.

Fed Securities Held Outright Billions

The yellow highlights and numbers show March average vs the July average. Let's hone in on the changes.

Fed Securities Held Outright Change in Billions


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