In a significant policy shift, the Federal Reserve has revealed its intention to restart the purchase of US Treasuries in early 2026. This decision signals the conclusion of a three-year period dedicated to reducing its balance sheet, a move aimed at stabilizing financial markets amid rising concerns over government borrowing. According to the official information, this strategy is expected to have a profound impact on the economy.
Fed's Acquisition of Treasuries
The Fed plans to acquire approximately $35 billion in Treasuries each month, which is expected to result in a $20 billion monthly increase in its current balance sheet of $6.6 trillion. This strategy is designed to bolster market confidence and address apprehensions regarding the sustainability of government debt.
Impact on Treasury Yields
Analysts note that the recent decline in Treasury yields reflects a growing belief in the Fed's commitment to supporting the economy, further alleviating fears about fiscal stability.
The FTX Recovery Trust has begun distributing payments to creditors affected by the FTX collapse, focusing on those with smaller claims. This development contrasts with the Federal Reserve's recent policy shift regarding US Treasuries. For more details, see read more.
