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No, the Fed has unlimited buying power for Treasuries, so it could prop up the price as long as it wanted. The question is what the side effects of that would
by fennecfoxen 13y ago
No, the Fed has unlimited buying power for Treasuries, so it could prop up the price as long as it wanted.
The question is what the side effects of that would be. So perhaps I should say they can prop up the nominal price for as long as it wanted. The real price can't be manipulated so easily.