As the Federal Reserve (Fed) continues with its Quantitative Tightening (QT) program, questions
abound regarding the Treasury Department’s expanding funding needs. The QT program is designed
to reduce the Fed’s balance sheet — now $7.7 billion down from $9 billion — after Treasury notes
(mostly) were bought after economic concerns intensified during the COVID-19-related pandemic.
Households and, perhaps surprisingly, foreign investors have been buyers recently, and with the amount
of Treasury supply coming to market, both will need to keep buying.

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