4 ms·
The Federal Reserve is not the US Treasury. The Fed buys these mortgage-backed securities with money printed out of thin air. Likewise, the dollars disappear ag
by mdavidn 5y ago
The Federal Reserve is not the US Treasury. The Fed buys these mortgage-backed securities with money printed out of thin air. Likewise, the dollars disappear again as the mortgages mature. If the securities default, everyone who owns dollars bears the cost in the form of inflation, not the Fed.