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 companyвЂ™s vow to cover back once again the mortgage because the matching asset. Continue reading The way the Fed intends to spend the national countryвЂ™s bills