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


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.”

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.”