>The net amount of liquidity is going down. They are removing liquidity.
Yes, they are actively injecting less liquidity than they were before which is my original point?
Wouldn't removing liquidity be actually selling holdings?
EDIT: Maybe this helps - you're taking for granted that the US Treasury auctions an increasingly large amount of Treasuries to cover an increasingly large amount of debt, but The Fed doesn't create that debt, that's a separate phenomenon. If the government balanced its budget for a year, does that create liquidity?
Yes, they are actively injecting less liquidity than they were before which is my original point?
Wouldn't removing liquidity be actually selling holdings?
EDIT: Maybe this helps - you're taking for granted that the US Treasury auctions an increasingly large amount of Treasuries to cover an increasingly large amount of debt, but The Fed doesn't create that debt, that's a separate phenomenon. If the government balanced its budget for a year, does that create liquidity?