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Comment by QuesnayJr | Hacker News Reader

The bulk of the Fed intervention is in the bond market, particularly Treasuries. They are also increasing their intervention in the exchange rate market. If the Fed was trying to pump up the stock market, wouldn't they buy stocks? Instead it looks like to me the Fed is essentially financing the US government's fiscal stimulus.

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A large portion of the stimulus is going to publicly traded companies, so that would have the effect of propping up stocks that may otherwise trend towards zero.

There are more or less no limits on the stimulus money, so corporations that have issued debt to buy back shares can use it to retire that debt and then issue even more debt in the current hyper-low rate environment. It's essentially a way for companies to transfer the money into the hands of their executive management.

I had a very hard time understanding why this setup was so widely accepted during the last corporate welfare program in 2008/2009 when the amount was in the $500B range.

I’m now at a complete loss as to why there isn’t more of an outcry when it’s in the $3T range.

Because most people don’t really understand it, or think it’s too complicated to understand

It’s not being widely reported. Saying that all our troubles are due to Coronavirus allows for a lot to be covered up.

The Federal Reserve isn’t the only central bank and some central banks like the BOJ and Swiss Central Banks are buying stocks directly. The Swiss Central Bank is buying US tech stocks heavily.

there is kind of a wink wink nudge nudge understanding that we'll (us fed) do it if there is a dire need for it. just not yet.

When you remove income by eliminating Treasuries from circulation, where do you get your income from?

There is a need for a supply of income - from pensions largely. There’s less income in circulation, so the price of income generating assets go up.

They are not allowed to buy stocks. By buying bonds they force bond holders to get out of them and into stocks.

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