In 2009, the global financial market was like a basin of cold water, and central banks around the world rushed to make moves, and the Federal Reserve was no exception, engaging in a big move called "quantitative easing".
Originally, this thing was used to bail out the market, which means that the Federal Reserve printed a lot of money, and then bought a large number of bonds, and flowed the money in the market to make the economy alive.
In 2020, when the pandemic hit, economic activity almost stopped, and market liquidity was tight.
At this time, the Federal Reserve did its best, not only continuing to repurchase bonds on a large scale, but also opening a special window for "treasury bond funds for purchasing corporate bonds" with the intention of continuing to maintain the circulation of market funds.
Things got a little awkward in 2021. According to official figures, the Fed's operations that year resulted in a whopping $120.4 billion in losses – an astronomical amount that can be distressed by a fraction of a second.
To uncover the truth of this loss, it is not difficult to find several key points: the purchase and sale of large quantities of securities, the purchase of special purpose funds, the operation of the repo market, the foreign exchange transaction in the overseas market, and the operation of loan deposits by the treasury department and the Federal Reserve System.
These are not small fights, and every step is a flow of billions or tens of billions of funds.
The Fed's loss is not a one-man show in the United States, it has directly affected the confidence of global financial markets.
As soon as the news came out, the global stock market, bond market, and even commodity market felt the shock.
The United States, the "big brother" of the global economy, sneezed, and other markets shivered again and again.
The heads of the U.S. government and the Federal Reserve are also having a lot of headaches at this time.
The operation that was originally planned to stabilize the market now seems to be a bit of a "shooting yourself in the foot".
Although the Fed's intentions were good, the results were quite surprising.
The changes in the financial markets are indeed unpredictable. The key now is to see how the Fed and the world's major markets adjust their strategies in order to stabilize the ship in this unknown financial turmoil.