Fed considers "sterilized" bond buying

03/8/2012 | Wall Street Journal, The · Bloomberg

The Federal Reserve is working on an approach to bond buying that would avoid increasing the overall money supply, to head off inflationary pressure. The U.S. central bank would print money to purchase mortgage-backed bonds or Treasury securities, then "sterilize" the transactions by borrowing back similar amounts of money for short periods, in effect holding the money supply stable.

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Wall Street Journal, The · Bloomberg

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