It sticks to plan, QT like clockwork: What the Fed did in details and charts, and my super-geek extra-fun dive into the “To Be Announced” market for MBS.
By Wolf Richter for WOLF STREET.
The Federal Reserve’s quantitative tightening (QT) completed its three-month phase-in period on August 31. During the phase-in of QT, the plan called for the Fed to allow its holdings of Treasury securities to drop by up to $30 billion per month by letting them mature without replacement, and allow its mortgage-backed securities (MBS) to drop by up to $17.5 billion per month, mostly from pass-through principal payments.
In September, the pace of QT roughly doubles with the caps doubling to $60 billion per month for Treasury securities and to $35 billion for MBS. So how did it go in August?