Latest / The Fiscal Policy Podcast with Fexingo: Government Budgets, Stimulus, and Public Spending
How The Federal Reserve Quietly Bought The Bond Market
The Federal Reserve’s balance sheet has grown to over eight trillion dollars, making it the largest single holder of US Treasuries and mortgage-backed securities in history. This episode examines how quantitative easing evolved from an emergency tool into a permanent fixture of market infrastructure, fundamentally altering how interest rates are set and who bears the cost of inflation. Lucas and Luna break down the mechanics of open market operations, the concept of term premium suppression, and why the Fed’s exit strategy is so fraught with risk. We look at specific data points regarding the…
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