Federal Reserve
How much US debt the Fed owns
The Federal Reserve holds $4.47 trillion of US Treasury securities — about 13.7% of all debt held by the public, as of the week of October 21, 2026.
What this shows
The Federal Reserve is one of the largest single holders of US debt and the holder that gets discussed least. It built most of this portfolio during the quantitative easing years after 2008 and the pandemic, and it has been letting it run off since 2022.
That matters for the federal budget in a way that rarely makes headlines. When the Fed holds a Treasury security, the government pays interest to an institution that returns almost all its profit to the Treasury, so that portion of the debt is close to free. As the holdings shrink, private investors buy the same securities back and keep the interest, and the government's bill rises without a single policy decision being made about it.
Treasury securities held
$4.47 trillion
par value, week of October 21, 2026
Share of debt held by the public
13.7%
of $32.68 trillion held outside government
Change over the past year
+$381.74 billion
since the week of October 15, 2025
Peak holdings
$5.68 trillion
week of April 20, 2022
Treasury holdings since 2003
What the Fed holds
Par value by type of security, week of October 21, 2026. Mortgage-backed securities worth $1.90 trillion are held separately and are not government debt.
Fed funds target range
3.75–4%
set by the Federal Open Market Committee
Effective fed funds rate
3.88%
October 27, 2026
SOFR
3.94%
secured overnight rate, October 28, 2026
Why the central bank holds government debt at all
Owning Treasury securities is how the Federal Reserve implements monetary policy. It buys them in the open market, never directly at Treasury auctions, and pays for them by creating bank reserves. Before 2008 the holdings were modest and grew slowly with the economy. After the financial crisis, and again in 2020, the Fed bought on a vast scale to push down long-term interest rates — the policy known as quantitative easing.
From mid-2022 it let securities mature without replacing them, shrinking its balance sheet. Over the most recent twelve months its Treasury holdings came out $381.74 billion higher.
What it means for the budget
The Treasury pays interest on the securities the Fed holds, like on any other. But the Fed normally returns its profits to the Treasury after covering its costs, so for years much of that interest effectively came back. When interest rates rose, the Fed began paying more on bank reserves than it earned on its older bonds, stopped those payments and started recording the shortfall as a deferred asset, to be recovered from future profits.
Is this the Fed printing money for the government?
That is the central question critics raise. The Fed argues its purchases serve monetary policy, not government financing, and the law forbids it from buying directly from the Treasury. Critics answer that when a central bank holds a large share of the debt, the difference becomes hard to see. The glossary entry on debt monetization sets out both sides.
Common questions
How much US government debt does the Federal Reserve own?
As of October 21, 2026, the Federal Reserve held $4.47 trillion of US Treasury securities at par value, about 13.7% of all debt held by the public. It also held $1.90 trillion of agency mortgage-backed securities, which are not government debt. This figure is the par value of the System Open Market Account and is not the same as the Treasury line on the Fed's weekly H.4.1 balance sheet, which is carried at amortised cost including unamortised premiums and discounts and therefore reads higher. Both are official; they answer different questions.
Is the Fed buying or selling Treasury securities?
Over the past year its Treasury holdings rose by $381.74 billion. They peaked at $5.68 trillion on April 20, 2022, after large purchases during the pandemic, and are $1.22 trillion below that peak today. The Fed does not buy directly from the Treasury; it buys and lets securities mature in the open market.
Does the Fed own most of the national debt?
No. Its Treasury holdings are about 11.0% of the total national debt. Most debt held by the public belongs to other investors — US funds, banks, pension funds and foreign holders — and a further part is owed to federal trust funds such as Social Security.
What interest rate does the Fed set right now?
The Federal Reserve's target range for the federal funds rate is 3.75–4%. The effective rate was 3.88% on October 27, 2026, and the Secured Overnight Financing Rate was 3.94%.
Sources
- Treasury holdingsFederal Reserve Bank of New York — System Open Market Account holdingsweek of October 21, 2026
- Policy ratesFederal Reserve Bank of New York — Reference rates (EFFR, SOFR)October 27, 2026
- Debt held by the publicUS Treasury — Debt to the PennyOctober 27, 2026
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