Market Driver: Fed Treasury Purchases?

Is the Fed purchasing Gvt bonds? Does that drive up the stock market? Where can i find this info?

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During Covid the Federal Reserve Board was purchasing bonds in a program called quantitative easing. It pushes up the price of bonds and lowers interest rates. In that effect it stimulates the economy, puts money in circulation and should help raise stock prices.

But that phase is over. Now the fed is letting its bonds mature without replacing them and may be selling its bonds. More bonds on the market should have the opposite effect. Falling bond prices raises interest rates. Must be public info somewhere but I’m not sure where to find it.

Rising interest rates does cause pros to reduce the expected future value of their investments. So they are very concerned about when the Feds will start reducing interest rates. Apparently not soon, but maybe late this year or early next year.


However, the Fed announced that instead of allowing $95B in bonds (mixed treasury and mortgage bonds) to mature each month, they will slow it down to $60B each month. That is effectively the Fed supplying (“leaving”) $35B more money each month to the economy and on their balance sheet. Many say that it can be considered the equivalent of an interest rate cut.

Here is the Federal Reserve statement about it.

Thanks, Mark. This is the piece i thought i heard but couldn’t locate this – so this is helping the market! Thank you for sharing & Fool On!