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."
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