The Federal Reserve may have $2 trillion in Treasury debt: A report
A lot of the interest in the Fed’s bond-buying program has been fueled by a belief that the Fed can tap into the $2.2 trillion that is already sitting in the Treasury.
Now, a new report suggests that it might not be that simple.
The Fed is also trying to reduce the pressure on the debt.
Federal Reserve officials have been working to find ways to fund the program, including raising the interest rates that bond buyers pay to the Fed.
That has created a glut of dollars in the market.
The Treasury has said that it will continue to issue bonds to help keep the Fed on the right track, and that interest rates are set to rise by 25 basis points this year.
In recent days, the Treasury has signaled that it would increase its bond purchases, which would raise interest rates to a new record high of 5.25%.
The Treasury’s move comes after Treasury Secretary Jack Lew said that he was confident that Congress would be able to raise $2 billion for the Fed program.
But the Treasury’s recent comments may be just the first sign of the Fed finding a way to use the $1.8 trillion that the Treasury holds in bonds to stimulate the economy.
“The Treasury, as we’ve said, will continue purchasing bonds to fund our ongoing efforts to stimulate our economy and the economy of the United States,” Treasury Secretary Lew said.
“That will continue until we find a way for the United State to raise its borrowing authority to $1 trillion.”
Lew also noted that the federal government would continue to lend money to the private sector to help it pay its debts.
Still, Lew said, the Fed could use more than $1 billion a month.