FED Is Biggest Buyer Of Government Debt

The chart above illustrates that the FED has emerged as the “buyer of last resort” for U.S. Treasury debt. The FED’s role as a buyer is particularly important now, as Treasury debt issuance is set to skyrocket from previous levels in 2021 and beyond.

We expect the FED to adjust its future purchases of Treasuries to manage interest rate levels. Therefore, the FED can be expected to be an even…