[goodcanadian]

From the article:

Why doesn’t the Fed sell its Treasury bonds then?

Because there’s no one buyer big enough to purchase them. The Federal Reserve itself is now the world’s largest holder of US government debt, after its bond-buying programs pushed its holdings above those of China.

In an otherwise interesting and well written article, this is just an absurd statement. They are under no obligation to sell all of them. They can sell whatever amount is appropriate to lower the price (and raise the rate) to where they want it. Further, toward the end of the article, it is suggested that they might have trouble raising the long term rates even if they are able to successfully raise the short term rate . . . well, duh, sell some of the long term treasury bonds.

[chralieboy]

Thank you for this, it is spot on.

It's like saying Amazon can't have a sale because then it would have to lower the price of every item it sells.

[irln]

Interesting point. Of the $2.46 Trillion of treasury holdings, $638 Billion have a duration of 10+ years [1]. Of the $1.7 Trillion of MBS, not surprisingly almost all are over 10 years.

[1]http://www.federalreserve.gov/releases/h41/Current/