Fed Will Be Main Buyer of Treasury Bills in 2026, BNY Says

The Federal Reserve will be the main buyer of Treasury bills, buying close to $400 billion this year, between reserve management purchases and reinvestments of mortgage-backed securities, according to BNY.

• That assumes $40 billion/month in RMPs through April and $20 billion/month thereafter, with an additional $10 billion to $15 billion/month in MBS reinvestments, according to John Velis, a foreign-exchange and macro strategist at BNY
• “Assuming total government issuance in 2026 is around $1.75tn, and about 25% of that is in T-bills (approximately $450bn), the Fed would be the main buyer,” Velis wrote in a note to clients on Tuesday ...