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Strategist: U.S. Treasury's increase in the supply of treasury bonds may pressure the Federal Reserve to increase purchases "

According to online reports, Shan Ahmed, strategist at Metlife Investment Management, said in a report that the U.S. Treasury's plan to issue more treasury bills to fill the deficit may pressure the Federal Reserve to buy more short-term government bonds. Fed officials said one of the central bank's goals is to match its investment portfolio structure with the structure of U.S. Treasury bonds circulating in the market. Currently, the Federal Reserve's $4.2 trillion treasury bond investment portfolio only contains $195 billion in treasury bonds, accounting for about 5%. Ahmed wrote: "The Treasury's increased use of treasury bills will further deviate the Fed's position structure from this goal." Based on previous assumptions about the size of the ideal portfolio, Metlife strategists said the Fed would need to buy nearly $900 billion in treasury bills to increase its holdings to a level that matches the current ratio of 20.2%. If the Treasury increases the proportion of treasury bonds issued to 25%, the Federal Reserve will need to buy more than $1.3 trillion in treasury bonds.

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