Beginning in October 2019, the Federal Reserve started buying $60 billion a month of treasury bills, which are short-term government obligations. Because the bills are short-lived, the Federal Reserve has been adamant that this new program is not QE4.
A dispute is brewing in the financial press between two financial heavyweights: Paul Sheard, Executive Vice President and Chief Economist of S&P Global, and Urjit Patel, Governor of the Reserve Bank of India.
Seven months into a plan where $36 billion should have been shrunk only $14 billion has been reduced. (The Federal Reserves owned $1.68 trillion of mortgage-backed securities when they started)
Speaking in late July to Bloomberg News, Greenspan warned, “Equity bears hunting for excess in the stock market might be better off worrying about bond prices… That is where the actual bubble is, and when it pops, it’ll be bad for everyone.”
You have probably been in conversations where people worried about what would happen to interest rates if China stopped buying our government debt. Moreover, before China, people were concerned about Japan
Why Tax Cuts, Combined With the Federal Reserve Reducing Its Balance Sheet, Is So Risky for Our Economy
One big flaw in the discussion about the congressional tax bill is the lack of understanding of the additional revenue from the sale of new government bonds that will be required to fund the government.