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posted ago by iloveturtles ago by iloveturtles +20 / -0

It's an open secret that during periods of "quantitative easing" the Federal Reserve purchases treasuries on the open market with dollars it basically creates. This increases the money supply and stimulates the economy. It also causes inflation.

In 2024, the US tax payer is paying roughly 1 billion dollars a day in interest servicing ~34 trillion dollars of debt. Some of that debt is owned by the Federal Reserve.

According to the St Louis Fed, the Federal Reserve holds around 5 trillion dollars of securities, 2/3rds of which are held as Treasuries (US Debt).

With interest rates going up, the Federal Reserve shouldn't be earning even more interest on treasuries it bought with made up money.

source: https://fred.stlouisfed.org/series/TREAST