The short story...
The majority of all the growth in the IntraGovernmental fund since Jan 1, 2014 has come from the "other" category...the category used for all those funds so small as not to be named individually.
Since Jan 1, 2014...
- total IG surplus + $730 b
- Social Security surplus + $115 b
- Highway Trust Fund +$74 b
- DIF +$30b
- Federal Employee Retirement Fund +$130 b
- "Other" surplus has grown + $422 B
That is to say that almost 60% of the growth in IG since Jan 1, 2014 has come from invisible, tiny fund surplus' skyrocketing. These funds represented just 15% of IG as of Jan 1, 2014. The "other" category has almost doubled in that same time. But this has reduced marketable Treasury issuance by $422 b...just as QE was winding down. Coincidence? This maintained nearly a $25 b/mo "QE" like bid since QE ended in late 2014.
The long story...
To gauge federal government spending, some look at the federal deficit but I prefer to watch the annual Treasury issuance. To get the latest view, I'm showing July 1 to June 30 annual issuance vs. 10yr Treasury yield (below).
The chart below shows annual growth in the two sources of Treasury buying, Public vs. IG. From 1990 through 2008, IG took down 53% of all Treasury issuance in GAS (Government Account Series, also known as non-marketable debt). This left only 47% to be issued or auctioned off as marketable debt to the Public (Public=Federal Reserve, Foreigners, & Domestic buyers). However, this changed radically from 2009 onward, when IG decreased, Treasury issuance increased, and IG took down just 10% of issuance through 2015. This meant the Public did nearly all the Treasury buying led by Foreigners, the Fed's QE, but very little assistance from the Domestic Public (US based pensions, banks, insurers, private citizens). But 2016 turned around as IG took down 30% of the resurgent Treasury issuance and the Domestic buyers the remaining 70%. How and why US based insurers, banks, and pensions alike came up with $850 billion of cash over the past twelve months to buy record low yielding Treasury debt...a mystery. How they did this with markets at record highs apparently without selling other assets to raise this cash and instead also buying stocks...let's just be honest...this is the stuff of banana republics.
And the chart below shows the interplay of the annual growth in IG vs. the annual growth in the Fed's balance sheet (QE). As IG faded, QE was stepped up to fill the void...and when QE faded, IG again filled in...no year more so than 2016 when the Fed's balance sheet receded by <$13> billion and IG hit it's $373 billion all time peak growth.