The feds. Note the basis for my statement is that Treasury note you can think of as an exchangable paper you can barter for its face value of 7B or so.
So by the Fed giving 10 billion to the bank and taking the paper they are adding (10-7) 3B in new cash.
I may be totally wrong because I don’t understand all the mechanics, derivatives, and so on that this operation actually involves.
The feds. Note the basis for my statement is that Treasury note you can think of as an exchangable paper you can barter for its face value of 7B or so.
So by the Fed giving 10 billion to the bank and taking the paper they are adding (10-7) 3B in new cash.
I may be totally wrong because I don’t understand all the mechanics, derivatives, and so on that this operation actually involves.
That’s not how it works.
The 10B are new money, unless they came from someone not the FED (notes are not money).
See the barter argument. Also yeah the Fed will probably issue a new note for 10B which removes exactly that from the economy.