Federal Reserve could be the most power organization on earth. And their news always appear in the front page. Federal Reserve insist to tapering QE despite poor data .
Federal Reserve on 2014-02-2014 is holding 2,278,256 Millions of Dollars US Treasure bond. And they are the biggest creditor to US government. And the number will continue to rise until end of QE. Another US$297,500 millions will be added. By end of Aug 2014, Federal Reserve could be holding US$2,575,756 Millions.
China ,the 2nd biggest creditor, which are holding around $1,300,000 millions of dollars. Their holding is far behind Federal Reserve. In recent news, China Government are reducing their holding.
If QE never end, Federal Reserve would continue to buy bond. Other investors would suffer from falling exchange rate and very low return. It will discourage investors to invest in US treasury. Foreign fund would withdraw from bond market, USD exchange rate could collapse. Therefore Feberal Reserve have to end QE before it is too late.
With QE tapering, US exchange rate will rise. Foreign investors could be benefit in buying bond.
Data source http://research.stlouisfed.org/fred2/series/TREAST
No comments:
Post a Comment
I appreciate you comment. You can email me too. I hope you find my blog useful