As the Federal Reserve injects billions into the U.S. Treasury market to absorb record debt issuance, BlackRock’s Rick Rieder warns that the real upside remains in stocks.
Fed’s Quiet Bond Accumulation
“The Federal Reserve is loading up on US Treasuries,” noted The Kobeissi Letter, citing FRED data, revealing that the central bank has purchased $237 billion in Treasuries since December.
This aggressive accumulation pushes the Fed’s total Treasury holdings to $4.4 trillion—the highest level since July 2024. Treasuries now make up nearly 66% of the Fed’s swelling $6.7 trillion balance sheet, signaling that the central bank is actively “propping up the Treasury market.”
This massive intervention acts as a necessary shock absorber against an unrelenting flood of government debt. Rieder, BlackRock’s Chief Investment Officer of Global Fixed Income, highlighted this intense pressure, noting the bond market is grappling with “$520 billion a week of trade of gross supply of Treasuries.”
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