Graph and download economic data for Assets: Securities Held Outright: U.S. Treasury Securities: All: Wednesday Level (TREAST) from 2002-12-18 to 2025-03-19 about maturity, securities, Treasury, and USA.

The Federal Reserve's balance sheet has undergone significant changes since 2007, reflecting its response to major economic crises. From a modest 0.9 trillion U.S. dollars at the end of 2007, it ballooned to approximately 6.76 trillion U.S. dollars by March 2025. This dramatic expansion, particularly during the 2008 financial crisis and the COVID-19 pandemic - both of which resulted in negative annual GDP growth in the U.S. - showcases the Fed's crucial role in stabilizing the economy through expansionary monetary policies. Impact on inflation and interest rates The Fed's expansionary measures, while aimed at stimulating economic growth, have had notable effects on inflation and interest rates. Following the quantitative easing in 2020, inflation in the United States reached eight percent in 2022, the highest since 1991. However, by November 2024, inflation had declined to 2.7 percent. Concurrently, the Federal Reserve implemented a series of interest rate hikes, with the rate peaking at 5.33 percent in August 2023, before the first rate cut since September 2021 occurred in September 2024. Financial implications for the Federal Reserve The expansion of the Fed's balance sheet and subsequent interest rate hikes have had significant financial implications. In 2023, the Fed reported a negative net income of 114.3 billion U.S. dollars, a stark contrast to the 58.84 billion U.S. dollars profit in 2022. This unprecedented shift was primarily due to rapidly rising interest rates, which caused the Fed's interest expenses to soar to over 281 billion U.S. dollars in 2023. Despite this, the Fed's net interest income on securities acquired through open market operations reached a record high of 174.53 billion U.S. dollars in the same year.

Graph and download economic data for Repurchase Agreements: Treasury Securities Purchased by the Federal Reserve in the Temporary Open Market Operations (RPTSYD) from 2000-01-03 to 2025-03-26 about repurchase agreements, purchase, trade, securities, Treasury, and USA.

As of December 2024, Japan held United States treasury securities totaling about 1.06 trillion U.S. dollars. Foreign holders of United States treasury debt According to the Federal Reserve and U.S. Department of the Treasury, foreign countries held a total of 8.5 trillion U.S. dollars in U.S. treasury securities as of December 2024. Of the total held by foreign countries, Japan and Mainland China held the greatest portions, with China holding 759 billion U.S. dollars in U.S. securities. The U.S. public debt In 2023, the United States had a total public national debt of 33.2 trillion U.S. dollars, an amount that has been rising steadily, particularly since 2008. In 2023, the total interest expense on debt held by the public of the United States reached 678 billion U.S. dollars, while 197 billion U.S. dollars in interest expense were intra governmental debt holdings. Total outlays of the U.S. government were 6.1 trillion U.S. dollars in 2023. By 2029, spending is projected to reach 8.3 trillion U.S. dollars.

Graph and download economic data for Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity, Quoted on an Investment Basis (WGS30YR) from 1977-02-18 to 2025-03-21 about 30-year, maturity, Treasury, interest rate, interest, rate, and USA.

Graph and download economic data for Assets: Securities Held Outright: U.S. Treasury Securities: Maturing in over 10 Years: Wednesday Level (TREAS10Y) from 2002-12-18 to 2025-03-19 about 10 years +, maturity, securities, Treasury, and USA.

The Federal Reserve's balance sheet ballooned following its announcement to carry out quantitative easing to increase the liquidity of U.S. banks in early 2020. The balance sheet continued to grow in the following period as well, with a downward trend in 2023. As of February 29, 2024, the Fed's balance sheet amounted to roughly 7.6 trillion U.S. dollars. The most drastic increase in the observed period took place in the first half of 2020. This measure was taken to increase the money supply and stimulate economic growth in the wake of the damage caused by the COVID-19 pandemic. The Federal Reserve was not the only institution that implemented an expansionary monetary policy in response to the pandemic. For instance, the European Central Bank expanded its money supply in March 2020 and kept doing so over the following months. How do central banks increase the amount of money in circulation? Central banks can increase the money circulating in the economy in many ways. For instance, they can decrease banks’ reserve requirements to stimulate lending or decrease the interest rates to reduce the cost of borrowing for commercial banks. Alternatively, central banks can engage in open market operations (OMO) and buy securities such as government bonds from commercial banks or institutions. By conducting open market operations, the Federal Reserve expanded its balance sheet by seven trillion U.S. dollars between 2007 and 2023. All these measures aim to increase bank loans to entrepreneurs and consumers in order to stimulate employment and economic growth. Impact of COVID-19 on the U.S. economy The COVID-19 pandemic had a tremendous impact on national economies worldwide, and the United States was no exception. During the early months of the crisis, many lost their jobs, mostly those in lower-income categories. As a consequence, many Americans found it difficult to pay their rent and cover basic household expenses. Furthermore, in April 2022, most small business owners claimed that the pandemic had a large or moderate negative effect on their businesses. Overall, the gross domestic product (GDP) of the United States decreased by roughly 2.2 percent in 2020. In the following years, however, it increased notably, surpassing 25 trillion U.S. dollars in 2022.

These rates are the daily secondary market quotation on the most recently auctioned Treasury Bills for each maturity tranche (4-week, 13-week, 26-week, and 52-week) that Treasury currently issues new Bills. Market quotations are obtained at approximately 3:30 PM each business day by the Federal Reserve Bank of New York. The Bank Discount rate is the rate at which a Bill is quoted in the secondary market and is based on the par value, amount of the discount and a 360-day year. The Coupon Equivalent, also called the Bond Equivalent, or the Investment Yield, is the bill's yield based on the purchase price, discount, and a 365- or 366-day year. The Coupon Equivalent can be used to compare the yield on a discount bill to the yield on a nominal coupon bond that pays semiannual interest.

Graph and download economic data for Federal Debt Held by the Public as Percent of Gross Domestic Product (FYGFGDQ188S) from Q1 1970 to Q4 2024 about public, debt, federal, GDP, and USA.

As of October 16, 2024, the yield for a ten-year U.S. government bond was 4.04 percent, while the yield for a two-year bond was 3.96 percent. This represents an inverted yield curve, whereby bonds of longer maturities provide a lower yield, reflecting investors' expectations for a decline in long-term interest rates. Hence, making long-term debt holders open to more risk under the uncertainty around the condition of financial markets in the future. That markets are uncertain can be seen by considering both the short-term fluctuations, and the long-term downward trend, of the yields of U.S. government bonds from 2006 to 2021, before the treasury yield curve increased again significantly in 2022 and 2023. What are government bonds? Government bonds, otherwise called ‘sovereign’ or ‘treasury’ bonds, are financial instruments used by governments to raise money for government spending. Investors give the government a certain amount of money (the ‘face value’), to be repaid at a specified time in the future (the ‘maturity date’). In addition, the government makes regular periodic interest payments (called ‘coupon payments’). Once initially issued, government bonds are tradable on financial markets, meaning their value can fluctuate over time (even though the underlying face value and coupon payments remain the same). Investors are attracted to government bonds as, provided the country in question has a stable economy and political system, they are a very safe investment. Accordingly, in periods of economic turmoil, investors may be willing to accept a negative overall return in order to have a safe haven for their money. For example, once the market value is compared to the total received from remaining interest payments and the face value, investors have been willing to accept a negative return on two-year German government bonds between 2014 and 2021. Conversely, if the underlying economy and political structures are weak, investors demand a higher return to compensate for the higher risk they take on. Consequently, the return on bonds in emerging markets like Brazil are consistently higher than that of the United States (and other developed economies). Inverted yield curves When investors are worried about the financial future, it can lead to what is called an ‘inverted yield curve’. An inverted yield curve is where investors pay more for short term bonds than long term, indicating they do not have confidence in long-term financial conditions. Historically, the yield curve has historically inverted before each of the last five U.S. recessions. The last U.S. yield curve inversion occurred at several brief points in 2019 – a trend which continued until the Federal Reserve cut interest rates several times over that year. However, the ultimate trigger for the next recession was the unpredicted, exogenous shock of the global coronavirus (COVID-19) pandemic, showing how such informal indicators may be grounded just as much in coincidence as causation.

In August 2024, the average yield on ten-year government bonds in the United States was equal to 3.87 percent. This was the highest of the selected developed economies considered in this statistic. The countries with the lowest yield were Germany and Japan, with 2.24 and 0.88 percent respectively. Bonds and yields – additional information The bond yield indicates the level of return that the investor can expect from a given type of bond. The government of Italy, for instance, offered the investors 3.63 percent yield on ten-year government bonds for borrowing their money in August 2024. In the United States, government needs are also financed by selling various debt instruments such as Treasury bills, notes, bonds and savings bonds to investors. The largest holders of U.S. debt are Federal Reserve and Government accounts in the United States. The major foreign holders of the United States treasury securities are Japan, Mainland China, and the United Kingdom.

In 2018, the average total volume of treasury securities traded per day was over 547 billion U.S. dollars. This means that every day the market was open, the average amount of U.S. government securities bought and sold amounted to half a trillion U.S. dollars in that year.

What are treasury securities?

Treasury securities are U.S. government debt, bonds sold to finance the United States government. Since the United States is seen as a guaranteed investment, these bonds are often used by large financial firms as collateral. The yield on a Treasury bond is minimal, but these institutions often do not hold them until maturity, instead trading them on secondary market.

Other options

The federal funds rate is the rate the Federal Reserve charges banks for overnight loans. Other assets, such as mortgaged backed securities, can also be used like treasury securities. Mortgage backed securities are bundles of home loans packaged together. Such bundling makes the overall security safer, unless there is a systemic shock to the housing market which would undermine the entire package.

Graph and download economic data for Federal Debt Held by Foreign and International Investors as Percent of Gross Domestic Product (HBFIGDQ188S) from Q1 1970 to Q4 2024 about foreign, debt, federal, GDP, and USA.

United States Net Purchases: Flow: CFB: Federal Government Retirement Funds data was reported at -0.063 USD bn in Mar 2018. This records a decrease from the previous number of -0.016 USD bn for Dec 2017. United States Net Purchases: Flow: CFB: Federal Government Retirement Funds data is updated quarterly, averaging 0.000 USD bn from Dec 1951 (Median) to Mar 2018, with 266 observations. The data reached an all-time high of 5.711 USD bn in Sep 2003 and a record low of -1.497 USD bn in Sep 2005. United States Net Purchases: Flow: CFB: Federal Government Retirement Funds data remains active status in CEIC and is reported by Federal Reserve Board. The data is categorized under Global Database’s USA – Table US.AB048: Funds by Instruments: Flows and Outstanding: Corporate and Foreign Bonds.

United States Net Purchases: Flow: CFB: Foreign Banking Offices in the US data was reported at -7.923 USD bn in Mar 2018. This records a decrease from the previous number of 5.958 USD bn for Dec 2017. United States Net Purchases: Flow: CFB: Foreign Banking Offices in the US data is updated quarterly, averaging 0.013 USD bn from Dec 1951 (Median) to Mar 2018, with 266 observations. The data reached an all-time high of 111.247 USD bn in Sep 2010 and a record low of -130.269 USD bn in Dec 2010. United States Net Purchases: Flow: CFB: Foreign Banking Offices in the US data remains active status in CEIC and is reported by Federal Reserve Board. The data is categorized under Global Database’s USA – Table US.AB048: Funds by Instruments: Flows and Outstanding: Corporate and Foreign Bonds.

From 2003 to 2025, the central banks of the United States, United Kingdom, and European Union exhibited remarkably similar interest rate patterns, reflecting shared global economic conditions. In the early 2000s, rates were initially low to stimulate growth, then increased as economies showed signs of overheating prior to 2008. The financial crisis that year prompted sharp rate cuts to near-zero levels, which persisted for an extended period to support economic recovery. The COVID-19 pandemic in 2020 led to further rate reductions to historic lows, aiming to mitigate economic fallout. However, surging inflation in 2022 triggered a dramatic policy shift, with the Federal Reserve, Bank of England, and European Central Bank significantly raising rates to curb price pressures. As inflation stabilized in late 2023 and early 2024, the ECB and Bank of England initiated rate cuts by mid-2024, and the Federal Reserve also implemented its first cut in three years, with forecasts suggesting a gradual decrease in all major interest rates between 2025 and 2026. Divergent approaches within the European Union While the ECB sets a benchmark rate for the Eurozone, individual EU countries have adopted diverse strategies to address their unique economic circumstances. For instance, Hungary set the highest rate in the EU at 13 percent in September 2023, gradually reducing it to 6.5 percent by October 2024. In contrast, Sweden implemented more aggressive cuts, lowering its rate to 2.25 percent by February 2025, the lowest among EU members. These variations highlight the complex economic landscape that European central banks must navigate, balancing inflation control with economic growth support. Global context and future outlook The interest rate changes in major economies have had far-reaching effects on global financial markets. Government bond yields, for example, reflect these policy shifts and investor sentiment. As of June 2024, the United States had the highest 10-year government bond yield among developed economies at 4.09 percent, while Switzerland had the lowest at 0.69 percent. These rates serve as important benchmarks for borrowing costs and economic expectations worldwide.

Graph and download economic data for Households and Nonprofit Organizations; Treasury Securities; Asset, Level (HNOTSAQ027S) from Q4 1945 to Q4 2024 about IMA, nonprofit organizations, savings, bonds, securities, Treasury, assets, households, and USA.

United States Net Purchases: Outs: CFB: Discrepancy data was reported at 609.008 USD bn in Dec 2018. This records an increase from the previous number of 509.236 USD bn for Sep 2018. United States Net Purchases: Outs: CFB: Discrepancy data is updated quarterly, averaging 0.000 USD bn from Dec 1951 (Median) to Dec 2018, with 269 observations. The data reached an all-time high of 866.128 USD bn in Dec 2008 and a record low of -684.361 USD bn in Sep 2012. United States Net Purchases: Outs: CFB: Discrepancy data remains active status in CEIC and is reported by Federal Reserve Board. The data is categorized under Global Database’s United States – Table US.AB048: Funds by Instruments: Flows and Outstanding: Corporate and Foreign Bonds.

United States Net Purchases: Flow: CFB: Credit Unions (CU) data was reported at 0.233 USD bn in Mar 2018. This records an increase from the previous number of -0.070 USD bn for Dec 2017. United States Net Purchases: Flow: CFB: Credit Unions (CU) data is updated quarterly, averaging 0.000 USD bn from Dec 1951 (Median) to Mar 2018, with 266 observations. The data reached an all-time high of 9.864 USD bn in Mar 2007 and a record low of -26.083 USD bn in Dec 2010. United States Net Purchases: Flow: CFB: Credit Unions (CU) data remains active status in CEIC and is reported by Federal Reserve Board. The data is categorized under Global Database’s USA – Table US.AB048: Funds by Instruments: Flows and Outstanding: Corporate and Foreign Bonds.

United States Net Purchases: Flow: saar: CFB: GSE: Other data was reported at -0.440 USD bn in Mar 2018. This records a decrease from the previous number of -0.408 USD bn for Dec 2017. United States Net Purchases: Flow: saar: CFB: GSE: Other data is updated quarterly, averaging 0.000 USD bn from Dec 1951 (Median) to Mar 2018, with 266 observations. The data reached an all-time high of 294.044 USD bn in Dec 2004 and a record low of -36.628 USD bn in Jun 2012. United States Net Purchases: Flow: saar: CFB: GSE: Other data remains active status in CEIC and is reported by Federal Reserve Board. The data is categorized under Global Database’s USA – Table US.AB048: Funds by Instruments: Flows and Outstanding: Corporate and Foreign Bonds.