📝Fed Holds A Relatively Small Share Of Public Debt: Wells Fargo

The optimal size and composition of each central bank balance sheet across the G7 is beyond the scope of this report. That said, we present the share of public debt held by each central bank in Figure 11. Unsurprisingly, the Bank of Japan tops the chart with holdings that amount to nearly 50% of Japan's public debt. At the other end of the spectrum, the Federal Reserve holds a relatively small share of the American public debt. At present, the Federal Reserve's share of the U.S. Treasury market is not historically elevated and sits effectively at its average over the past 30 years (Figure 12). Relative to 20 years ago, the biggest change is the Fed's accumulation of mortgage-backed securities (MBS), which have gone from zero before the 2008 financial crisis to $2.4 trillion today. - Wells Fargo