Federal Reserve Underwrites Washington’s Spending Binge

In Analysis by Michael Rae

On October 11, 2019, the U.S. Federal Reserve announced it would begin buying billions of Treasury bills every month to ensure the nation’s banking system would have “ample reserves” through the end of 2019 as part of its efforts to help prevent a liquidity crisis from wreaking havoc in U.S. money markets.
That crisis was sparked by a surge in borrowing by the federal government, which was authorized by a bipartisan majority in the U.S. Congress in “the worst budget deal in history” in late July 2019. Two and half months later, the amount of borrowing the U.S. government needed to

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