Reply To: Fed isn't "really" printing money?

#17991
jmherbener
Participant

Yes, commercial banks bought Treasuries in the past and hold a substantial portfolio of them. For the week ending Sept. 4, 2013, commercial banks were holding $1,760.6 billion in “Treasury and Agency Securities.”

http://www.federalreserve.gov/releases/h8/current/

The Fed is not permitted to buy Treasury securities directly from the Treasury. It must buy them in the “open market” and thus, the phrase “open market operations.”

http://www.federalreserve.gov/faqs/money_12851.htm