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by nojs 2192 days ago
> The fed is also being somewhat judicious and buying shorter term securities (less than 5 years), so in essence they are only creating the money for the term of the bond they buy - they can choose to remove the money from the system when these bonds mature.

I don’t think the Fed has any plans to shrink its balance sheet in the near future or probably ever. And what happens when these BBB- bonds turn out to be junk and the companies default?

1 comments

If the bonds default, then the fed get's left holding the bag, and their balance-sheet shrinks by default :)