I'd be more concerned about the other ~$6.3T of holdings in the Fed's ~$9T balance sheet.[a] The Fed has publicly announced it will allow its bond holdings to m

I'd be more concerned about the other ~$6.3T of holdings in the Fed's ~$9T balance sheet.[a] The Fed has publicly announced it will allow its bond holdings to mature, to the tune of ~$90B/month, without recycling the proceeds back into treasury and agency-sponsored mortgage-backed bonds. Given that all treasury bonds that mature and most mortgage bonds paid off via home sales are refinanced, private investors -- that is, mutual funds, ETFs, pension plans, individuals, etc. -- will have to buy an additional ~$90B of bonds every month, give or take, going forward. That's $1T/year that private investors must find to buy treasury and agency bonds newly issued to refinance old ones. Without a doubt, this will have a large, persistent effect on treasury yields and credit spreads. [a] https://fred.stlouisfed.org/graph/?g=PlId https://fred.stlouisfed.org/graph/?g=PlId