Monday, December 27, 2010

Fed Places 70% Per-Security Limit on Treasury Debt Holdings

The Federal Reserve is clearly pigging out on Treasury securities. It has just more than doubled its pant size.

The Fed has announced it is increasing the per-security limit on treasury debt holdings to 70 per cent as part of it's quantitative easing program.

The previous limit was 30 percent.


  1. Whoa! Double what was previously authorized? What do you think Banana Ben saw that scared him bad enough to increase his intake of toxic substances?

  2. @Tailwind: It's a simple supply problem. Fed monopsony guaranteed that if it left the old limit in place, it would run out of Uncle Sam IOUs to buy. The Fed also wants to minimize its disruption to the Treasury secondary market. Now that's exactly the kind of restraint that would make Jefferson proud.

  3. Could you explain what the per security limit affects/is?

  4. Too bad these a$$holes didn't have a drug habit as bad as their debt habit.