Fed Decreases Balance Sheet By $17 Billion (Half T-Notes, Half Agency MBS, Adds $1.8 Billion In Inflation Protection)

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Fed Chair Jay Powell said he was going to pursue rate normalization (aka, letting rates rise). And he seems to be a man of his word: The Fed today deccreased their balance sheet by $17+ billion.

$9.6 billion was due to maturing Treasury notes and $9.3 billion was due to agency mortgage=backed securities (Agency MBS)/

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On the other hand,  The Fed once again bought $1.8 billion of TIPs.

Here is a chart showing the SOM Holdings:

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Here is Fed Chair Jerome “Jay” Powell reciting Shakespeare’s Hamlet: “I must be cruel only to be kind; Thus bad begins, and worse remains behind.” 

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