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The FED can buy bonds in an auction at will. Because it prints the money to do so. It's not like the FED goes "Uh oh, those bonds are too expensive for me".
by TekMol 4y ago
The FED can buy bonds in an auction at will. Because it prints the money to do so. It's not like the FED goes "Uh oh, those bonds are too expensive for me".
- senthil_rajasek 4y agoIt's a recent phenomenon. During the covid crisis the fed became a buyer of last resort. It's not usual.
- TekMol 4y agoMaybe it's the new normal? Just like doubling the money supply every couple of years seems to be the new normal since it started in 2008?
- senthil_rajasek 4y agoMaybe, but it's not normal today.