The Federal QE2 effort expired at the end of June. But before it did, the Federal Reserve took more than its share of treasuries.

According to Morgan Stanley, during the last eight months of QE2, the Feds purchased 85 percent of all new Treasury issuance. By June 30th, the Fed held more Treasuries than China.

In addition, this purchasing was not balanced across the spectrum of maturities. Most occurred between the two-year note and 30-year bonds, weighing heavily on the middle of the scale and leaving either end uninflated.