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Fed to Buy $40 Billion in Bonds Starting December

12/11/2025

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Summary

Story summary

The Federal Reserve will begin purchasing short-dated government bonds starting December 12, 2025 to manage market liquidity and maintain control over its interest rate target.
The initial purchases will total around $40 billion per month and are designed to offset expected increases in non-reserve liabilities in April.
Federal Reserve Chair Jerome Powell emphasized that this action is technical and does not alter monetary policy.
The Fed ended its quantitative tightening in October due to tightening liquidity, which had begun to affect the federal funds rate.
The aim of these steps is to ensure an ample supply of reserves while navigating upcoming liquidity challenges.

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Story summary

The Federal Reserve will begin purchasing short-dated government bonds starting December 12, 2025 to manage market liquidity and maintain control over its interest rate target.
The initial purchases will total around $40 billion per month and are designed to offset expected increases in non-reserve liabilities in April.
Federal Reserve Chair Jerome Powell emphasized that this action is technical and does not alter monetary policy.
The Fed ended its quantitative tightening in October due to tightening liquidity, which had begun to affect the federal funds rate.
The aim of these steps is to ensure an ample supply of reserves while navigating upcoming liquidity challenges.