🇺🇸 FED JUST BOUGHT $20 BILLION WORTH OF 3 YEAR BONDS. DOES THIS MEANS QE AND MONEY PRINTING HAS STARTED ?

🧵 Let me explain : Fed is reinvesting not printing

The May 5 Treasury auction saw something interesting:

👉 $20.47B bought by SOMA.

People ask: "Did the Fed just start QE again?"

Let’s break it down 🧠👇

📌 What is SOMA?

SOMA = System Open Market Account

It’s the Fed’s portfolio of U.S. Treasury and agency securities.

Managed by the NY Fed, it’s used to implement monetary policy.

🛠 Why Did SOMA Buy in This Auction?

These are reinvestment purchases, not QE.

When bonds mature in the Fed’s balance sheet, SOMA reinvests the cash into new Treasury securities — to maintain its size.

⚠️ Important:

SOMA buys are:

Pre-scheduled

Non-competitive (they don’t affect pricing)

Not injecting "new money" like QE

So this $20.47B is just maintenance, not stimulus.

📊 Total Auction:

$168.7B tendered

$78.5B accepted

Of which SOMA = $20.47B (Fed)

The rest went to public investors like dealers, funds, etc.

🔍 Bottom Line:

SOMA buys doesn’t mean QE

They’re like rolling over your FD — not spending new cash, just keeping the balance alive.