Economist Brian Wesbury reveals the Fed's QE whack a mole game regarding US debt

I think they are wrong. I made same mistake last week. The Fed is not QEing. You know this because the Fed balance sheet is still decreasing. Fed QEing would increase the Fed balance sheet. It's U.S. Treasury buying back it's own bonds.

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the Fed balance sheet

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And we are certain this is accurate since it’s audited and reviewable, right?

Last number I heard was nearly $7 trillion of debt/QE money showing on the Fed balance sheet. Wesbury says the Fed has $5 trillion scattered across the private banks and the Fed is paying 4.5% to keep that money out of circulation.

The problem is the Fed has $9 trillion of debt to sell this year and right now they are having a hard time finding any nations who want the US government debt.

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In 2025, the US government will need to refinance approximately $9.2 trillion in debt. This includes the debt that matures in 2025 and needs to be rolled over. This amount represents roughly one-third of all outstanding debt held by the public,

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Last number I heard was nearly $7 trillion of debt/QE money showing on the Fed balance sheet. Wesbury says the Fed has $5 trillion scattered across the private banks and the Fed is paying 4.5% to keep that money out of circulation.

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Here is the Fed balance sheet: LINK

When the underlying assets mature on their balance sheet the Fed is supposed to burn the cash and return interest to the U.S. Treasury if it's Treasury assets maturing (minus expenses).

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the Fed balance sheet


And we are certain this is accurate since it’s audited and reviewable, right?

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Auditing the Fed is akin to trying to audit Fort Knox or an all encompassing and comprehensive audit of the Federal government. These institutions don't want anyone peaking up their skirts.

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When the underlying assets mature on their balance sheet the Fed is supposed to burn the cash and return interest to the U.S. Treasury if it's Treasury assets maturing (minus expenses).

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The Federal Reserve's balance sheet held approximately $6.73 trillion in assets as of April 2025. This includes Treasury securities, mortgage-backed securities, and other assets. A significant portion of these assets are Treasury securities, which accounted for $4.2 trillion of the total as of April 24, 2025. Additionally, the Fed holds $2.2 trillion in mortgage-backed securities.

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Auditing the Fed is akin to an all encompassing and comprehensive audit of the Federal government.


Except easier because the Fed is private and has nothing to do with government.

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Yep, there's no relationship at all.

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Last number I heard was nearly $7 trillion of debt/QE money showing on the Fed balance sheet.


Correct. But that is down from almost $9 trillion. QEing will grow the balance sheet. Tightening lowers it. The almost $9 trillion peak was used to help fund Biden’s Inflation Reduction Act (with an Orwellian name).

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Technically you are correct, they're trying to get QE money off the balance sheet but at the same time they have $9 trillion to sell this year. How do you think that's gonna work out?

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the Fed is paying 4.5% to keep that money out of circulation.

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Patently absurd to think the Fed dictates private banks from lending.

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they are having a hard time finding any nations who want the US government debt.

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No they aren’t and even if they were, the directs would happily accept what couldn’t be sold.

Bad mortgage debt gets bought and sold by NPL servicers and it can be very profitable so the Fed wouldn’t need to do that. The BK and foreclosure laws are absurd to the point where there’s very minimal bad loans anyways.

Typically the Fed buys securities to make people pretend they can control the system. It’s a “do something” policy that has never worked how it’s advertised.

Edit: by the way the FHLB bank would be the first line of defense in this example. And they certainly did offload bad debt for regionals two years ago.