So basically the Fed is doing QE again. They are using the interest on reserves from their SOMA account to purchase treasuries at bond auctions.
This is why the market is rising. The smart guys understand this.
QE=higher stock prices. pic.twitter.com/k6eKdAwacD
— QE Infinity (@StealthQE4) August 10, 2025
“The Federal Reserve just bought $43.6 billion in US treasuries in the span of a week, sparking concerns that a quiet quantitative easing operation is underway. New documents show the Fed purchased $8.8 billion in 30-year bonds on May 8th via its System Open Market Account (SOMA) – a move that followed a $34.8 billion purchase earlier that same week.” https://dailyhodl.com/2025/05/24/fed-quietly-buys-43600000000-in-us-treasuries-in-alleged-stealth-qe-operation-after-china-abruptly-dumps-billions-in-bonds/
“Over four days last week, without fanfare, the Fed vacuumed up $43.6 billion in U.S. Treasurys… Quietly returning to the quantitative-easing trough isn’t standard Fed housekeeping — it’s like a bank robber returning to the scene because he forgot his car keys.” https://finance.yahoo.com/news/why-fed-quietly-buying-billions-112500917.html
Mechanics:
- Purchases executed via SOMA (System Open Market Account)
- Labeled as “reinvestments,” but scale and timing match QE behavior
- Triggered by foreign bond dumping (China sold $18.9B in March)
- Fed balance sheet stopped shrinking – QT paused
Implications:
- Liquidity injections without formal QE announcement
- Market impact: dollar weakening, commodities rising, gold surging
- Fed avoids political backlash by not labeling it QE