You can tell these games are all about balance sheets. Who gives a flying fuck if the FEDS balance sheet has losses ? They just print up some more dollar script notes and walla!
Are they putting on this show for everyone to have concern while they rape and pillage the world?
Under the existing plan, the Fed would commence asset sales at some point after policymakers begin to raise interest rates.
But things have changed since the plan was put in place.
Not only has the central bank’s balance sheet grown in value, but the average duration on the bonds has risen by 3 years to about 10 years. That means the Fed could suffer big losses on its portfolio later this decade if it sells assets when interest rates climb.
Bubble, loss concerns played down by Fed officials
The Fed’s balance sheet has reached $3 trillion in recent weeks.
When interest rates rise, the Fed may suffer losses that mean it will not pay any income to the government.
If Congress is feeling budget pressure, it may be unhappy with no income from the Fed.
This could lead the Fed to delay balance sheet normalization and fail to exit its easy policy as needed to keep inflation in check.
Powell said this scenario seemed “highly unlikely.”