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The FED receive interest payments. They don't make them. But yes, raising too much too fast will cause stress and defaults, and nobody wants that unless it's a
by mikaeluman 5y ago
The FED receive interest payments. They don't make them.
But yes, raising too much too fast will cause stress and defaults, and nobody wants that unless it's absolutely necessary.
- voisin 5y agoFederal Reserve receives but the payments are made as a share of the government’s budget, no? So the Fed is trying to balance inflation with effectively defunding the governments non-debt servicing initiatives.
- cheriot 5y agoHigher interest payments just means the Gov borrows more. I don't think the Fed is concerned about the ability to issue new debt.
- drexlspivey 5y agoThe coupon payments in the government’s existing debt are fixed and as such they are not effected by any changes. It will only affect newly issued debt while the debt is being rolled over which will take some time (the average maturity is around 5 years)
- deleted 5y ago[deleted]
- louloulou 5y agoFed profits (after paying out their 6% shareholder dividend to banks) gets remitted back to the US treasury. With a captured Fed, this is nothing but the government printing money to cancel their debt, with an extra step where banks skim some of it off the top.