How much Stock does the Fed own?

Discussion in 'Economics' started by Chausey, Feb 2, 2012.

  1. Chausey


    Any data on how much stock the Fed owns?
  2. If you are talking about equities, like in the stock market, they don't own any.

    However, the chances are very good that something like the PPT exists. Who is responsible for it - Fed or Treasury - I don't know.

    Whoever - they would work through a 3rd party.
  3. Chausey


    The Fed owns treasuries and Red Roof Inn. But they don't own stock? Oh yes they do. What else is explained for this support in the stock market. Bulls are so cocky because they know the Fed holds equities and can't sell out their positions. Free money. They must buy S&P futures and roll them perhaps.
  4. When you hear the fed is supporting the stock market it means that they are doing it with the interest rate. They keep the rates low, it helps consumers to spend, people to get credit and also investors are moving away from fixed income since they know they will pay very low interest rates for a long time so they are more willing to take risk so they move their money to the stock market.
    And this is what happened at the last FOMC meeting.
  5. How does the Fed buy stocks if they haven't any money?

    And if they buy stocks without any money, what does this tell us?
  6. Chausey


    Used to be the Fed didn't have to buy or support anything directly. In another thread, people are talking about the 6 trillion in u.s. debt they hold. There is too much at stake to leave this market free and open to go wherever, especially with computers making the majority of the volume, as volumes drop, computers have less opportunity to make money, less arbitrage on the traders, so who is left to be the real active players? All this is a vulnerable market and politically nobody can stomach another 2008 replay. The Fed is there everyday, just like debt auctions.
  7. Shanb


    Welcome to Econ 101.

    The op is asking a specific question...which I don't think there is a specific answer to. Does the fed buy equities in some manner? I don't know if they do it directly but there has long been speculation that the fed is routinely in the market in some form bidding up futures etc. who knows , but it would be in their interest since the wealth effect is the backbone of Bens plan to support the economy!
  8. Are you sure you are thinking about the Fed and not the Treasury? Because the Treasury owns equities. Sometimes people get the Fed & the Treasury confused.
  9. Here we go again...
  10. I think it was Galbraith who said the central banking system was so simple people overcomplicated it to try and make sense of it.
    #10     Feb 3, 2012