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To: DannyTN

if they can find buyers on the open market for the rate the it’s possible, but what happens when the buyers demand a better return? Does the fed take a hit and increase the interest rate? Or do the bonds not sale - then what does the fed do?


63 posted on 01/03/2014 1:00:34 PM PST by reed13k (For evil to triumph it is only necessary for good men to do nothings)
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To: reed13k
"if they can find buyers on the open market for the rate the it’s possible, but what happens when the buyers demand a better return? Does the fed take a hit and increase the interest rate? Or do the bonds not sale - then what does the fed do?"

The Fed would take the hit if it needed to, to reign in inflation. The FED has by law, 3 goals: Full employment, a stable dollar and low interest.

They will keep easing until they are satisfied with the employment picture. Then they will worry about inflation. If we hit full employment and inflation was kicking up, I doubt they would hesitate to sell the bonds.

The FED makes a fortune anyway that they had back over to the treasury each year. They can afford to take the hit.

68 posted on 01/03/2014 2:49:06 PM PST by DannyTN (A>)
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