The Federal Reserve announced on Friday that it will buy short term debt of the U.S. government to maintain ample reserves in the banking system.
The surprise announcement followed an unusual and unscheduled, and previously undisclosed, meeting of the Federal Open Market Committee on October 4 via videoconference.
Fed - Balance - Sheet - Expansion - Treasury
The Fed said it will start its new balance sheet expansion by buying around $60 billion of Treasury bills a month. It is hoped that the purchases, which swap reserves for Treasury bills, will relieve stress in the bank funding market.
Earlier this week, Jerome Powell indicated that the Fed would start to expand its balance sheet but insisted the policy...