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by mariojv 841 days ago
Not sure, but BOJ was a net seller of stocks in 2023: https://asia.nikkei.com/Economy/Bank-of-Japan/BOJ-turned-net...

So, it seems like they're at least starting to offload their stock holdings.

I was very surprised when I learned that their central bank was purchasing stocks. I'd heard about it first in 2020, but apparently it had been going on before the pandemic.

It makes me wonder if the US stock market crashed hard enough if the Fed would start buying up stocks on the major indexes. Are they even legally allowed to do this? If so, what other assets can the Fed acquire? REITs? What about direct real estate purchases? I wonder if corporate real estate crashed hard enough from remote work if they'd prop it up.

2 comments

If push came to shove, the FED's last resort could be to buy stock ETFs
Bro that happened in covid
The federal reserve buys bonds in order to increase the money supply, as happened during 2020. It isn't allowed to buy stock. In 2020, the fed bought treasury securities, mortgage bonds and also corporate bonds for the first time (which might be what you are thinking of).
???

Are you claiming the Fed has directly purchased US stocks? I don't think they have.

I've only ever seen reports of them buying government and mortgage debt: https://www.cnbc.com/2022/12/22/how-the-federal-reserve-affe...

You can argue the purpose of these actions was to prop up the stock market, but I don't think they've ever intervened in as direct a manner as the Bank of Japan has with buying company stocks.

No it didn’t. The fed doesn’t buy stocks