You Got To Be Kidding…..Fed Is Now Second Largest Holder Of U.S. Treasury Bonds

Posted By on October 6, 2010

Today’s POMO is over: at $2.069 billion, the operation was right in line with  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. Number one China lies dead ahead.

While the official breakdown will likely be a few weeks 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 just passed Japan’s total of $821.0 Billion as of July 2010 The U.S. central bank is just $25 billion away from being the Treasury’s largest creditor. Will the Fed dominate any and all future debt restructuring negotiations with what is, essentially, itself……inquiring minds want to know.

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