Fed Increases its Treasury Security Purchase Limit to 70%


Treasury Security: When the Federal Reserve decided to execute a new course of Monetary Policy in November, it had a problem.

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It wanted to buy more longer-term Treasury securities, but it was already nearing its concentration limit for the amount of each specific Treasury Security it could hold.

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But since the rule was self-imposed, it lifted the limit, effectively doubling the amount it can purchase of any given Treasury Security issue. This is a pretty big change. The Central Bank had temporarily relaxed its 35 ...

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