Replies to post #429497 on Fannie Mae-No Politics (FNMA)

[Donotunderstand]

Sogo

I agree

They push money out -- buy bonds

They pull money in -- sell bonds

I might or might not agree if they make money - but on its face

they increase supply (of cash in our hands) in slow - sluggish - recessionary times (to induce low interest rates and increase inflation which then is super low) - buy bonds

they decrease supply (of cash in our hands) in fast - hot - inflationary times (to induce higher interest rates to slow the economy and attack inflation --- see Volker period) Sell bonds
(for those new to this - they issue PAPER that is not money and thus pull out real money)

This period is sort of in between
The economy is good but not hot - but the FED has been buying for years to keep the economy from getting deflationary etc.

So - as far as I can read - no one really knows the impact of the huge (albeit slow and careful) DRAW of cash as they sell "paper" and suck in cash

Will be interesting

They are selling paper - not as much to