Your preference has been saved. Remove your saved preference.
You must supply both a username and a password to login.
You must supply a username, password and token to login.
Sign on
Passport secured login icon  
Wealth Management
Asset Management
Asset Servicing
Insights & Research
About Northern Trust
Search go
Click to close drop down menu.
Click to close drop down menu.
Financial Intermediary
Learn about asset management solutions designed for Retirement Plan Advisors, TAMPs/Outsourcing Providers, Subadvisory Program Sponsors, RIAs/Financial Advisors and Trust Institutions.
Learn about asset management solutions including: global index management, active equity and fixed income, target retirement date funds, and manager of manager programs.
Get answers to your investment challenges with asset management capabilities including alternatives, exchange traded funds, fixed income, mutual funds and tax-advantaged equity.
Click to close drop down menu.
Northern Trust Logo

Weekly Economic Commentary


Fed’s Holdings of U.S. Treasury Securities Before the “Twist”

September 9, 2011

orange_carrat_arrow Download PDF Version

It is widely expected that the Fed will announce a restructuring of its balance sheet following the September 20-21 FOMC meeting. The restructuring or “twist” entails purchases of long dated government securities to replace its current holdings of short-term government securities, while maintaining the current size of the balance sheet, $2.841 trillion as of September 8, 2011. The restructuring should result in reducing holdings of short dated Treasury securities of roughly $1.5 trillion (see Chart 2, sum of Treasury securities with maturities ranging from within 15 days to 10 years).

Chart 1 - 09 09 2011


Chart 2 - 09 09 2011

Will the “twist” succeed in reversing the declining trend of real GDP growth in the term (see Chart 3)? For this and more in-depth discussion about the Fed’s much anticipated “twist” read the September 9, 2011 edition of the U.S. Economic and Interest Rate Outlook.


Chart 3 - 09 09 2011











The opinions expressed herein are those of the author and do not necessarily represent the views of The Northern Trust Company. The Northern Trust Company does not warrant the accuracy or completeness of information contained herein, such information is subject to change and is not intended to influence your investment decisions.