Wednesday, December 10, 2008

Weird? Fed thinks about issuing its own debt

I'm not sure why the Fed may want to issue government bonds, a role reserved now for the Treasury Dept. This WSJ article hints the Fed and Treasury may have policy differences. And the Fed is limited to creating cash reserves, which may cause inflation. And financing bailouts by printing money may bugger up its intermediary banks, and make controlling rates more difficult.

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