The Fed Owns 31.89% Of The Bond Market: Up 0.3% In One Week

We have beaten this topic to death so we won't say much more, suffice to say the chart below shows what is the key issue: too much monetization and it's game over for the reserve currency; too little and it's an uncontrolled market sell off, and with every passing week the margin for error gets less and less.

• Last week the Fed owned $1.663 trillion in ten year equivalents, or 31.59% of total
• This week the Fed owned $1.678 trillion in ten year equivalents, or 31.89% of total

In other words, the Fed's holdings of the Treasury market, expressed though the correct 10 Year equivalent basis not the completely wrong total notional, rose by a whopping 0.3% in one week!

Annualize that (especially without a taper) to understand just how cornered the Fed now is (especially with the TBAC already complaining non-stop about lack of Treasury liquidity and eligible private-sector collateral).

For much more on this, see here.

Tick Tock... Tick Tock... Tick Tock...

Chart: Stone McCarthy