Fed's Bernanke Hits Delete, Erases $1 Trillion In Debt

Although investors worried about potential impending inflation and monetizing debt, there is something to be said about the Fed's buying of a "vast" portfolio of mortgage and Treasury securities. According to a IBD study and this article, the bond buys may knock down the rising public debt down almost $1 trillion by the end of 2015. Coupled with the threat of a credit downgrade and lowered government borrowing rate, there might be more at stake here than Bernanke let's on. ".research suggests that the cumulative impact of the Fed's bond buying has lowered rates more than 1 percentage point. By 2015, that could save the government over $100 billion a year on more than $10 trillion in government debt not held by the Fed."

Register or login for access to this item and much more

All Financial Planning content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access