The scale of Treasury bills issued by the U.S. Department of the Treasury has surged, which may prompt the Federal Reserve to consider halting the balance sheet reduction

On Tuesday, Powell hinted that the Federal Reserve might end its balance sheet reduction in the coming months, with one point left unspoken: the role played by the U.S. Treasury. The U.S. Treasury is continuously increasing the supply of Treasury bills, which means a need to maintain a higher general account balance. For most of the past year, the target balance for the U.S. Treasury's general account has been around $850 billion. Barclays strategist Samuel Earl stated that the growth of the Treasury's general account balance further depletes reserves, increasing the pressure on the Federal Reserve to stop the balance sheet reduction, ultimately necessitating an expansion of the balance sheet. (Bloomberg)