Reply to China dumping bonds – how exactly would the fed salvation work?

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Reply to "China dumping bonds – how exactly would the fed salvation work?"

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]Very possible ruin that is occurring in the bond market will continue, especially if China decides to strategically dump US treasuries.

Another poster had mentioned that the Fed could buy up all that bond and stabilize the treasury market, how exactly would that work and what would be the ramifications? I can’t imagine it’s a simple Execution like that with no consequences [/quote] The US treasury market is the most liquid market for anything, in the world, it trades 24/7. China holds 700 Billion out of 36 Trillion. Chump change to Jay Powell. The Fed has cut their balance sheet over 2 Trillion since 2022, they could easily expand to buy the entire 700 Billion if China was to unload.[/quote]

That's part of the picture.  "At the end of January, foreign countries owned $1.32 trillion worth of U.S. mortgage-backed securities, or 15% of the total outstanding, according to Ginnie Mae.""

They dump that and good luck finding a mortgage.  The real estate (residential) market would collapse.[/quote]

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