By Garfield Reynolds, Bloomberg Markets Live reporter and strategist
Global central banks are cutting their balance sheets rapidly, fostering an upside bias to yields. The massive hole in demand heightens the danger of sudden bond market swings despite Treasury Secretary Scott Bessent’s quest for lower yields.
Data from the central banks of the US, Europe, UK, Canada and Australia show a total reduction in balance sheets of around $6 trillion since a 2022 peak, as part of their quantitative tightening. The Bank of Japan has been excluded from calculations as it has yet to substantially reduce its total assets.
