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Michelle and Vox unpack a quiet but important Fed balance-sheet question: when the Fed shrinks its Treasury holdings, the government debt does not disappear, but the buyer changes. Listeners will understand why quantitative tightening can push long yields higher, why MBS runoff is not the same as Treasury runoff, and why retail investors should avoid reading the 10-year yield as a simple Fed asset-size meter.
By VoxMichelle and Vox unpack a quiet but important Fed balance-sheet question: when the Fed shrinks its Treasury holdings, the government debt does not disappear, but the buyer changes. Listeners will understand why quantitative tightening can push long yields higher, why MBS runoff is not the same as Treasury runoff, and why retail investors should avoid reading the 10-year yield as a simple Fed asset-size meter.