The Federal Reserve has announced plans to purchase approximately $220 billion in short-term Treasury securities over the next 12 months. This projection comes from a survey by China Catcher, reflecting indications from central bank officials. In December, Federal Reserve policymakers deemed the reserve levels in the financial system as “moderately adequate” and decided to initiate these short-term purchases. The Fed intends to buy around $40 billion in short-term government bonds monthly, with two additional purchase operations scheduled for January. This measure aims to stabilize liquidity in the financial system and maintain balance in financial markets. Treasury securities are debt instruments issued by the U.S. government with varying maturities; short-term Treasuries are generally considered low-risk. Purchases by the central bank increase cash supply in the market, influencing interest rates and economic activity. The Federal Reserve’s strategy is a crucial step toward ensuring financial stability and addressing potential economic challenges, though its effects will depend on other market conditions and the global economic environment.
Source: binance
