Treasury Bill Supply Sways Fed Balance-Sheet Calculus (Correct)

Unstated when Federal Reserve Chair Jerome Powell indicated Tuesday that the central bank is likely to stop shedding Treasury securities from its balance sheet in the coming months was the role of the Treasury Department in setting the stage.

The department has been increasing the supply of bills — Treasury securities that mature in a year or less — in a way that means the federal government needs to carry a larger checking-account balance. For most of the past year, the target balance for the so-called Treasury General Accounthas been $850 billion. The next quarterly update on Nov. 3 ...