Purchase of Long-Term Treasury Bonds
Data File:
Date:
March 18, 2009
Policy Area:
Monetary Policy
Economic Target:
Government and GSEs
Action Type:
Other
Amount Spent:
$1,327.69 billion On 3/19/2009 The Federal Open Market Committee announced that the Fed would purchase up to $300 billion in "longer term" Treasury securities. This would have the effect of driving down interest rates on these securities and various types of loans.
This action was taken in conjunction with the Fed's decision to increase its purchase of federal agency debt and mortgage-backed securites.
On 8/10/2010, the FOMC announced that it would take the proceeds from maturing agency debt and mortgage-backed securities and invest them in long-term Treasury bonds. The move would keep the balance sheet constant, rather than having it shrink as previously expected.
On 11/3/2010, the FOMC announced that it would make an additional purchase of $600 billion in longer-term Treasury securities, on top of the commitment made back in August. The two moves combined would result in the purchase of about $900 billion by the end of the second quarter of 2011.
Notes:
Maximum amount is currently unknown. Amount spent as of 1/23/2013 (http://www.clevelandfed.org/research/data/credit_easing/index.cfm). Activities of the Federal Reserve are not directly recorded in the federal budget. However, each year the Federal Reserve remits a portion of its earnings to the general treasury. This remittance is generally in the range of $20-$30 billion per year, but the CBO estimates that the Fed's earnings will be lower by approximately $90 billion over the next ten years.