I read this article and can't make sense of the analysis. Can the more financially literate translate and answer my below questions? Thank you!
"The Fed has bought treasuries and mortgage-backed bonds to inject liquidity into the markets. These purchases have caused the Fed’s balance sheet to explode from about $700bn in 2008 to $4.5tn and left the Fed holding about 15 per cent of US government debt and a third of long-term bonds. Today, the Fed promised to reduce the Federal Reserve’s holdings of Treasury and agency securities. Yellen plans to let those bonds expire when they come due. Then the Fed will mostly just sit on its hands, rather than replace those expired bonds with new bonds, as it has done in recent years."
Where did the Fed get the money to buy bonds and what does it mean to let them expire when they come due instead of replacing them with new bonds? The government bought shitty home loans that were packaged and is now trying to sell them back into the market? What is a treasury or mortgage backed bond? Thanks again
Submitted June 16, 2017 at 12:23AM by CrazyMxdUpWorld http://ift.tt/2rChmVD
