No single country or institution has reduced its Treasury holdings more significantly than the Fed in the past three years.
Eventually, the Fed β or another arm of the U.S. government β will need to step back in as the dominant buyer of Treasuries, in my view.
Ending quantitative tightening does not itself overhaul Treasury demand structurally, but itβs a necessary part of moving toward that scenario.
More importantly:
The US is steadily moving toward a framework of full financial repression, and the Fedβs policy stance will need to reflect that shift.
