As expected, the FOMC voted to end its Quantitative Tightening program on December 1, so it will no longer allow $5 billion of Treasury debt a month roll off. The FOMC did vote to continue allowing $35 billion a month of Mortgage-Backed-Securities (MBS) to roll off. The $35 billion will be invested in short term Treasury Bills. The Fed’s balance sheet has a weighted average of 8.9 years. The increase in T-bills will gradually shorten the weighted average and reduce the Fed’s exposure to higher Treasury yields. At the end of 2024 the Federal Reserve's holdings have experienced ...
