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Yes because I am also giving you $100 when you give me $95. If you gave me $100 15 years ago and today ask for $5 back, you're taking money from me (also every

• RC_ITR 4y ago
  You’re at the wrong stage of the metaphor. The Fed has actively purchased new bonds worth roughly 10% of its holdings from the open market each year just to keep the balance constant. QE requires active support to remain in place. Now the Fed is purchasing new bonds worth roughly 9% of its holdings each year, and like sure that’s less than max, but it’s still gross buying like $900bn of treasuries this year (instead of the $1tn it would’ve otherwise). The problem that a lot of people have here is they think “well the treasury issues new bonds to make up for the bonds that mature,” which again, sure, but that’s an independent phenomenon from what the Fed is doing. Congress could balance the budget and that wouldn’t change what the fed is doing rn.
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  • ubercow13 4y ago
    The purchase of bonds by the Fed for the purpose of rolling over its holdings is not on the open market. It is not doing 10% of the same thing it did to build that balance sheet during QE again every year.