Why The Taper Matters (In One Simple Chart)

Obviously, there are numerous reasons why (no matter what the economic situation is) the Fed will need to Taper (deficits, technical fragilities, and sentiment). Furthermore, it seems the world is more than happy to give the central bankers the benefit of the doubt that not only is Tapering not tightening but that Tapering is a 'positive' as it means all is rosy in the world (despite our earlier point of the 'difficulty' that any actual unwind poses). However, there is one big reason (highlighted further this morning in the TIC data) why the Fed's Taper matters... they are (simply put) the only one buying...

5Y-30Y Treasury holdings...

Source: BofAML