Fed’s Quiet Treasury Buying Raises Eyebrows as China Offloads U.S. Debt
Recent activity in the bond market is fueling speculation that the Federal Reserve may be engaging in a subtle form of monetary easing.
According to newly released data, the Fed scooped up over $43 billion in U.S. Treasuries in just one week through its System Open Market Account (SOMA). That includes $8.8 billion in long-term bonds purchased on May 8—shortly after a $34.8 billion acquisition earlier in the same week.
While the central bank describes these moves as routine reinvestments to manage liquidity and stabilize interest rates, some market watchers aren’t convinced. In a recent MarketWatch column, analyst Charlie Garcia dubbed the activity “monetary policy on tiptoes,” suggesting it resembles stealth quantitative easing.
The timing has added fuel to the discussion. The buying spree follows a significant sell-off by China, which dumped nearly $19 billion in U.S. bonds in March. China’s holdings now stand at $765.4 billion—trailing behind the U.K. and Japan, which hold $779 billion and $1.13 trillion, respectively.
Whether this signals a quiet shift in policy or is just part of regular balance sheet operations, it has reignited debates around global demand for U.S. debt and the Fed’s evolving role in bond markets.
Alexander Stefanov
Reporter at Coindoo
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over 8 years of experience covering the crypto, blockchain and fintech industries, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics.
