The Fed is back in the bond market. No cameras. No policy announcement. Just $43.6 billion in U.S. Treasuries scooped up in a single week.
In May 2025, the Fed quietly bought $43.6 billion through its System Open Market Account (SOMA) — including $8.8 billion in 30-year bonds on May 8 https://dailyhodl.com/2025/05/24/fed-quietly-buys-43600000000-in-us-treasuries-in-alleged-stealth-qe-operation-after-china-abruptly-dumps-billions-in-bonds/
The official term is “reinvestment.” Analysts call it something else: monetary policy on tiptoes.
“Quietly returning to the quantitative-easing trough isn’t standard Fed housekeeping… it’s stealth easing.” https://dinarrecaps.com/our-blog/stealth-qe-fed-secretly-bought-436b-in-bonds-why-are-they-hiding-it
The timing is no accident. In March, China dumped $18.9 billion in Treasuries, cutting its holdings to $765.4 billion https://dailyhodl.com/2025/05/18/china-dumps-18900000000-in-treasuries-as-us-government-faces-major-dilemma-macro-analyst-luke-gromen/
The Fed’s Reverse Repo Facility has also collapsed from $2.5 trillion at peak to $148 billion in August https://coinedition.com/fed-buys-20-billion-in-bonds-is-stealth-qe-here-to-pump-crypto/
Liquidity is now spilling into risk assets. Crypto, gold, and stocks are climbing while bond yields are being forced down.
“The Fed’s stealth QE is bullish for bitcoin, gold, and commodities.” https://economictimes.indiatimes.com/news/international/us/us-fed-buying-bonds-secretly-heres-how-it-will-impact-investors-gold-and-bitcoin/articleshow/121251784.cms
The money supply is surging again — M2 just hit $22.02 trillion, the highest ever https://fred.stlouisfed.org/series/M2SL
Meanwhile, real-world prices are hitting small businesses in the teeth.
“The cost of everything’s just going up… hamburger meat prices surged nearly 21% year-over-year.” https://www.cnn.com/2025/08/10/business/restaurants-food-costs-consumer-spending
Local restaurants are stuck between rising input costs and customers spending less.
“I need to raise my prices again right now, but I’m concerned that I’m going to price people out.” https://www.cnn.com/2025/08/10/business/restaurants-food-costs-consumer-spending
Food costs are up 21% in June compared to four years ago. Wholesale inflation is up 17.5%. Margins are getting crushed. Labor costs are climbing. Tips are shrinking.
“Restaurants have very little wiggle room… if the math doesn’t work, they have to close up shop.” https://www.cnn.com/2025/08/10/business/restaurants-food-costs-consumer-spending
The Fed is flooding markets with liquidity while the dinner table gets more expensive.
So basically the Fed is doing QE again. They are using the interest on reserves from their SOMA account to purchase treasuries at bond auctions.
This is why the market is rising. The smart guys understand this.
QE=higher stock prices. pic.twitter.com/k6eKdAwacD
— QE Infinity (@StealthQE4) August 10, 2025
