🏦 Fed’s $43B Stealth Move: Quiet Treasury Purchases Amid China’s Sell-Off
In a revealing MarketWatch opinion piece, Charlie Garcia dubbed the Federal Reserve’s recent actions as “monetary policy on tiptoes,” igniting debate over whether the central bank is engaging in stealth quantitative easing (QE). While the Fed insists these purchases are simply routine reinvestments of maturing assets — a method to manage liquidity and interest rates — the timing raises eyebrows.
In March alone, China offloaded $18.9 billion in U.S. Treasuries, diverging sharply from the trend seen in most other countries, which increased their holdings. As a result, China has now slipped to the third-largest foreign holder of U.S. debt, behind Japan ($1.13 trillion) and the United Kingdom ($779 billion), with current holdings at $765.4 billion.
This realignment is fueling speculation that the Fed may be stepping in quietly to stabilize the U.S. debt market as global dynamics shift. The central bank’s subtle ramp-up in Treasury purchases may signal a behind-the-scenes effort to absorb selling pressure — all while maintaining the appearance of monetary neutrality.
