mephiska

It’s not a “stealth bailout.” This is the result of the fed owning long maturity assets bought when rates were low, while the fed is now paying higher interest on the overnight bank deposits to keep rates high to control inflation. In 2018 this was predicted to happen if rates needed to be raised (ie to control inflation).

Here is the actual context for that chart

https://www.stlouisfed.org/on-the-economy/2023/nov/fed-remittances-treasury-explaining-deferred-asset