Not even the Fed can buy enough long tail treasuries to make much of a difference.
Let me correct that: It can buy all it wants, but the printing goes into hyperdrive and the buck goes to the toilet, which means, of course, that rates go up, which means,of course, that the Fed has to keep printing to keep buying, which means, oh, well, you get the picture....United States of Zimbabwe.
The only entity that can affect Treasury rates directly is the Fed, but to do so it has to ruin the currency.
And why would it want to monetize? There are lots of other ways to do what it - and the Administration - wish to achieve.
Look at the language it used:
The Committee also is prepared to purchase longer-term Treasury securities if evolving circumstances indicate that such transactions would be particularly effective in improving conditions in private credit markets.
Worthy of the Greenspan, the Choreographer of Chaos.
Not going to happen.
Bernanke was jawboning.
Load up on TBT on dips. |
