The way the Fed intends to spend the national country’s bills

The way the Fed intends to spend the national country’s bills

The Fed and Treasury, together but split up

In normal times, the Fed creates cash (reserves) by purchasing Treasury bills. It offers a secured asset, the T-bill, and a obligation, the funds. The cash is supported by the T-bills, a principle that is good of policy.

If the Fed lends cash up to a bank or a business, the Fed likewise prints up cash, provides it to a business, and matters the company’s vow to cover back once again the mortgage because the matching asset. Continue reading The way the Fed intends to spend the national country’s bills