The Federal Reserve has bought more than $90 billion of short-dated government debt over the past eight weeks, the Treasury Department confirmed on Wednesday — and these purchases are now helping to keep the financial system running smoothly.
Fed officials regard this activity as a technical measure designed to ensure the smooth functioning of short-term money markets, while others have suggested the central bank’s efforts might be just another version of quantitative easing, or QE. No matter what it’s called, one crucial result of this T-bill buying has been a stabilization of short-term and even long-term market-based rates, and they already seem to be having an impact on many Americans.
Anyone who has tried to buy a home or obtain a long-term business loan in 2026 may have already noticed that borrowing costs are holding relatively steady. That’s partly because the Fed’s monthly purchases of short-term T- bills are easing strains in overnight funding markets, while also keeping long-term rates steady by extension. The central bank announced its plan to make these purchases last December.