US Fed will start buying Treasury bills to manage market liquidity
1–10 of 15 posts
Re: US Fed will start buying Treasury bills to manage market liquidity
#2Does it do this often? This is quite literally "printing money", right? Wasn't the Fed not supposed to be allowed to do that?
I'm guessing that if it doesn't do that, short term treasury yields will spike, and they don't want that to happen?
Doesn't this make treasury yields meaningless? If they're subsided by the Fed, then it means that nobody but them will buy them, since this subsidy means that short term treasuries are noncompetitive with other asset classes.
What am I missing?
Re: US Fed will start buying Treasury bills to manage market liquidity
#3Does it do this often? This is quite literally "printing money", right? Wasn't the Fed not supposed to be allowed to do that? I'm guessing that if it doesn't do that, short term treasury yields will spike, and they don't want that to happen? Doesn't this make treasury yields meaningless? If they're subsided by the Fed, then it means that nobody but them will buy them, since this subsidy means that short term treasuri…
There was a QA where they specifically called out this was NOT for QE (quantiative easing) or "money printing", but rather normal technical operations, I think build up more liquidity as needed.
Re: US Fed will start buying Treasury bills to manage market liquidity
#4Does it do this often? This is quite literally "printing money", right? Wasn't the Fed not supposed to be allowed to do that? I'm guessing that if it doesn't do that, short term treasury yields will spike, and they don't want that to happen? Doesn't this make treasury yields meaningless? If they're subsided by the Fed, then it means that nobody but them will buy them, since this subsidy means that short term treasuri…
I'm thinking the same thing. AFAICT this is still going to increase M0 and long-term inflation risk. I don't see how this rate cut is likely to change and/or stimulate the economy with the conditions we have today, just to add to the risk of stagflation.
Re: US Fed will start buying Treasury bills to manage market liquidity
#5Like watching a train wreck in slow motion. Maybe its not explicitly for quantitative easing (hah) but this devalues your dollar and your hard work even more.
Re: US Fed will start buying Treasury bills to manage market liquidity
#6Title was changed from original. Fed has always bought treasury bills. This is just doing so with more nuance. This doesn't mean they've begun QE (yet).
Re: US Fed will start buying Treasury bills to manage market liquidity
#7Like watching a train wreck in slow motion. Maybe its not explicitly for quantitative easing (hah) but this devalues your dollar and your hard work even more.
Part of the dollar's value is based on its stability and the stability of the US market, which this love is intended to support...
Re: US Fed will start buying Treasury bills to manage market liquidity
#8Does it do this often? This is quite literally "printing money", right? Wasn't the Fed not supposed to be allowed to do that? I'm guessing that if it doesn't do that, short term treasury yields will spike, and they don't want that to happen? Doesn't this make treasury yields meaningless? If they're subsided by the Fed, then it means that nobody but them will buy them, since this subsidy means that short term treasuri…
I'm thinking the same thing. AFAICT this is still going to increase M0 and long-term inflation risk. I don't see how this rate cut is likely to change and/or stimulate the economy with the conditions we have today, just to add to the risk of stagflation.
This article is referring to something separate from the rate cut, not sure if you're aware.
Re: US Fed will start buying Treasury bills to manage market liquidity
#9Like watching a train wreck in slow motion. Maybe its not explicitly for quantitative easing (hah) but this devalues your dollar and your hard work even more.
Part of the dollar's value is based on its stability and the stability of the US market, which this love is intended to support...
Unfortunately, this pushes other countries to consider divestment from the reserve currency. Its a irreversible loss of credit in unparalleled value.
Places like russia and chine benefit when foreign held dollars are unloaded.
Re: US Fed will start buying Treasury bills to manage market liquidity
#10Does it do this often? This is quite literally "printing money", right? Wasn't the Fed not supposed to be allowed to do that? I'm guessing that if it doesn't do that, short term treasury yields will spike, and they don't want that to happen? Doesn't this make treasury yields meaningless? If they're subsided by the Fed, then it means that nobody but them will buy them, since this subsidy means that short term treasuri…
The absolute least you can do is read the article. It is so frustrating to watch someone cry about being thirsty while water splashes their face