Journal Article
Considerations for the Longer-Run Maturity Composition of the Federal Reserve’s Treasury Portfolio
Abstract: The Federal Reserve’s Treasury portfolio is weighted toward long-duration assets, reflecting large-scale asset purchases deployed after the financial crisis and again during the pandemic. In the longer run, policymakers may prefer to return to a shorter-duration Treasury portfolio like the Fed maintained before 2008. However, the exact composition of the portfolio will depend on how policymakers balance competing considerations: policy space, interest rate risk, market neutrality, and safe-asset provision.
Keywords: Federal Open Market Committee (FOMC); System Open Market Account (SOMA); asset returns;
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https://www.kansascityfed.org/Economic%20Bulletin/documents/10463/EconomicBulletin24SenguptaSmith0828.pdf
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Bibliographic Information
Provider: Federal Reserve Bank of Kansas City
Part of Series: Economic Bulletin
Publication Date: 2024-08-28
Pages: 4