The Fed made this announcement and the ETF we use to short the Treasury bond, TBT, took a nose dive.
FAQs on Fed Monetization of US Debt
Fed to start buying Treasurys on Wednesday
By Deborah Levine
2:58 p.m. EDT March 24, 2009
NEW YORK (MarketWatch) -- The Federal Reserve Bank of New York will begin making purchases Of U.S. Treasury securities on Wednesday, starting with debt maturing between 2016 and 2019.
It will continue purchases on Friday and next week, with some days dedicated to purchases of maturities as short as 2-year notes with others for debt maturing in 17 to 30 years, it said in a schedule posted on its website Tuesday.
It did not indicate how much it would buy. The Fed announced last Wednesday it would purchase up to $3000 billion in Treasurys over the next six months. Treasurys rallied, with yields on 10-year notes (UST10Y UST10Y) paring an earlier increase to traded up 1 basis point to 2.66%.
"O that I could find in the desert a wayside shelter for travelers, that I might depart from my people. For they are all adulterers, an unfaithful mob of traitors. Their tongues are devious weapons, bent like drawn bows. With falsehoods rather than truth they have gained power. They commit one crime after another. They do not know me, says the Lord. I will make Jerusalem a heap of ruins, the lair of jackals. I will lay waste to Judah, a desolation where no one can live."
Jeremiah 9:2-3,11