Institution: The U.S. Treasury's increase in Treasury bill supply may pressure the Federal Reserve to increase purchases

Shan Ahmed, a strategist at Metlife Investment Management, stated 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 purchase more short-term government bonds. Federal Reserve officials have indicated that one of the central bank's goals is to align its portfolio structure with the structure of U.S. Treasury securities in circulation. Currently, the Federal Reserve's $4.2 trillion Treasury securities portfolio contains only $195 billion in Treasury bills, accounting for about 5%. Ahmed wrote, "The Treasury's increased use of Treasury bills will further skew the Federal Reserve's holdings away from this target."