> Which may have a bigger effect. Could you please explain? Isn't that just a wa... | Hacker News

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mtremsal on March 16, 2022 | parent | context | favorite | on: US Federal Reserve raises interest rates for first...

> Which may have a bigger effect.

Could you please explain? Isn't that just a way to "enforce" the target rate in auctions to the primary market?

avrionov on March 16, 2022 [–]

Here is a good explanation: https://www.brookings.edu/blog/up-front/2021/07/15/what-does...

The federal reserves buys bonds / treasures and mortgage backed securities.

It has an effect on long term interest rates and mortgages (keeping the interests low).

mtremsal on March 17, 2022 | [–]

I see. Thank you. I thought these purchases had stopped years ago when in fact the balance has never been higher.

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