The Federal Reserve is "quietly" expanding its balance sheet. This is not a restart of quantitative easing, but rather a forced intervention to support the Treasury bond market due to a lack of market buyers.

1️⃣ Treasury holdings hit a new high for the year
As of the latest data, the Fed's total holdings of Treasury bonds have increased to $4.4 trillion, the highest level since July 2024. Total assets have further expanded to $6.7 trillion, reaching a new high since May 2025.
2️⃣ Long-term interest rates are fragile, and the market lacks buyers
Since December 2025, the Fed has purchased a total of $237 billion in Treasury bonds, raising its holdings to 65.9% of total assets, the highest since March 2008. During normal balance sheet reduction, Treasury holdings should continue to decline, but now they are rising against the trend—indicating potential liquidity issues in the Treasury market, a lack of buyers, and the central bank being forced to step in to maintain order. Meanwhile, the 30-year U.S. Treasury yield has briefly broken the 5% psychological threshold.
3️⃣ Expectations for rate cuts are approaching zero
Current interest rate futures show that the market expects only about an 8% chance of rate cuts this year, down from 20% a month ago. The Fed is maintaining high interest rates while injecting liquidity into the market, and monetary policy is entering an unprecedented contradictory zone.
#美联储 #U.S. Bonds #货币政策 #Balance Sheet Expansion