It's Official: Fed Is Now Second Largest Holder Of US Treasury Bonds

Discussion in 'Economics' started by bearice, Oct 6, 2010.

  1. Today's POMO is over: at $2.069 billion, the operation was right in line with our expectations, coming in at a lofty 12.16 submitted to accepted ratio, as investors apparently are not too crazy about the yield perspective of the 4 2013 CUSIPs that were repruchased. However, what is far more important is that with holdings of $821.1 billion, the Fed is now officially the second largest holder of US Treasurys. Next up- China.

    While the official breakdown will likely be a few weeks late in coming, here is the math:

    Fed holdings as of September 30: $811,669


    POMO - September 30 (October 1 settlement): $2,200
    POMO - October 5: $5,190
    POMO - October 6: $2,069
    Total: $821.128 Billion, which compares to Japan total $821.0 Billion as of July 2010

    Congratulations, America: your central bank is just $25 billion away from being the Treasury's largest creditor, and thus able to dominate any and all future debt restructuring negotiations with what is, essentially, itself.
  2. Seems we're all sanguine about it. Should we be?
  3. dtan1e


    in short bankers own the gov't
  4. Ahhhh... then we can all sleep better.
  5. It's better off the fed owns the debt than china.
  6. It has been this way for yearssssss. I would love to know how the intergovernment bookkeeping really plays.

    Any idea??