FED Silently Buys 43 Billion USD Worth of US Bonds While China Sells Off

In a move described as "monetary policy on tiptoes" (monetary policy on tiptoes) by Charlie Garcia in an opinion piece published on MarketWatch, the Federal Reserve of America (Fed) has quietly executed a series of purchases of U.S. Treasury bonds worth up to 43 billion USD. This move comes shortly after China liquidated a large amount of U.S. bonds, raising suspicions that the Fed is engaging in "stealth QE" (stealth QE). The Fed explains this as a "normal reinvestment" activity. For a long time, the Fed has asserted that these bond purchase transactions are merely a reinvestment of maturing assets, aimed at maintaining the size of its balance sheet. However, the timing and scale of this buying activity have led many experts to believe that the Fed is implementing monetary easing measures discreetly, in order to control interest rates and money supply without raising market concerns about inflation or excessive intervention. China sells off nearly 19 billion USD in American bonds According to newly released data from the U.S. Department of the Treasury, in March alone, China sold 18.9 billion USD in U.S. Treasury bonds. This is one of the largest sell-offs in recent times, raising concerns that Beijing is continuing to diversify its foreign exchange reserves and gradually reduce its dependence on the USD amid escalating geopolitical tensions. Meanwhile, most other countries have increased their holdings of US bonds, indicating that the demand for this safe asset remains very high. The ranking of countries holding U.S. bonds changes. With this selling move, China has fallen to third place in the list of countries holding the most US bonds, after: Japan: 1.130 trillion USD UK: 779 billion USD China: 765.4 billion USD This is a clear sign that China is gradually divesting from the U.S. public debt market — a trend that has been ongoing for many years but now seems to be accelerating. Summary The Fed's unexpected large purchase of bonds at the same time that China significantly reduced its holdings has raised many questions about America's covert monetary policy. Although the Fed claims this is merely a reinvestment activity, the scale and timing have made it impossible for the market to ignore. In the context of fluctuating global geopolitical and financial conditions, any moves from major economies like America and China can create strong ripple effects in the international financial markets.