The FED’s(and Treasury) plan to save the banks back in March is both brilliant and devious. Not only was their announcement and implementation, to take all of the investment grade paper (treasuries and mortgage backed securities) that the banks were under water on, at face value, key to keeping the banks solvent, it set up the steal of the century for the FED. Knowing, that after their BS narrative of higher for longer has about run it’s course, the FED will be forced to cut rates in 2024, as the economy comes crashing back to reality. While rates on 10 and 20 year treasuries are well over 4% and nearly a full point higher than April when the FED started taking those securities, they will lower rates to the point where those long term securities end up yielding somewhere between 2-3% in the depths of the coming recession. So, even without ever going back to Zirp, the FED will have saved the zombie banks (at least for a while longer) and made a killing on all the securities it took in, on deep discounts, in the last 6 months. So the difference in price of 10 and 20 year paper will be significant when rates drop 2 to 2.5 percent over the next year or so, because those securities will still have years before they mature. You can be sure the FED won’t be holding on to maturity. Brilliant and devious.