On December 10th, the Federal Reserve launched a new round of Quantitative Easing. But this time, there is a catch: they want this round of money creation to be called “Reserve Management Purchases” (RMPs), and Chairman Powell has signaled that the Fed has no intention of ever ending them.
In this latest Macro Watch video, we go behind the curtain of RMPs to reveal the mechanics of what is essentially Perpetual QE. While the Fed maintains these purchases are merely a technical necessity to keep reserves “ample,” the reality is a massive, ongoing monetization of government debt. This process will involve the creation of $240 billion to $300 billion in new money every single year… Forever!
The Great Bank Plunder
Beyond debt monetization and asset price inflation, this new framework facilitates a staggering transfer of wealth. Consider these facts from the presentation:
• The 2024 Payday: The Federal Reserve paid a record $187 billion in interest to banks in Fiscal Year 2024 alone.
• The Deficit Connection: That single-year payment was equivalent to 10.3% of the entire U.S. federal deficit for 2024.
• The Big Five Windfall: For the five largest American banks, these payments accounted for 16.5% of their total net interest income last year.
• The Four-Year Total: In total, the Fed paid $616 billion in interest to private-sector banks and money market funds over just four years, from 2021 to 2024.
While the banks receive these massive subsidies, the Fed’s own cumulative losses have ballooned to $243 billion. This is a systematic plunder of public funds that has prompted several new bills in Congress aimed at stopping the “swindle.”
2026: A Year of Radical Restructuring?
The “Perpetual QE” era is beginning just as the Federal Reserve faces the potential for a total overhaul. From the Supreme Court case of Trump v. Cook in January to the end of Jerome Powell’s chairmanship in May 2026, the stage is set for a radical restructuring of U.S. monetary policy.
Will the Fed remain independent, or will 2026 be the year it becomes a direct arm of the White House?