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A History of Large-Scale Asset Purchases before the Federal Reserve

Author

Listed:
  • Chabot, Benjamin

    (Federal Reserve Bank of Chicago)

  • Herman, Gabe

    () (Federal Reserve Bank of Chicago)

Abstract

The authors find that between 1870 and 1913, large open market purchases of Treasury securities made by the U.S. Treasury Department narrowed the yield spread between Treasury bonds with high interest rate risk (the risk of an investment’s value changing on account of interest rate changes) and those with low interest rate risk.

Suggested Citation

  • Chabot, Benjamin & Herman, Gabe, 2013. "A History of Large-Scale Asset Purchases before the Federal Reserve," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q IV, pages 140-152.
    • Handle: RePEc:fip:fedhep:00002
    as

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    File URL: http://www.chicagofed.org/digital_assets/publications/economic_perspectives/2013/4Q2013_part2_chabot_herman.pdf
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    References listed on IDEAS

    as
    1. Vayanos, Dimitri & Vila, Jean-Luc, 2009. "A Preferred-Habitat Model of the Term Structure of Interest Rates," CEPR Discussion Papers 7547, C.E.P.R. Discussion Papers.
    2. D’Amico, Stefania & King, Thomas B., 2013. "Flow and stock effects of large-scale treasury purchases: Evidence on the importance of local supply," Journal of Financial Economics, Elsevier, vol. 108(2), pages 425-448.
    3. Andreas Fuster & Paul S. Willen, 2010. "$1.25 Trillion is still real money : some facts about the effects of the Federal Reserve’s mortgage market investments," Public Policy Discussion Paper 10-4, Federal Reserve Bank of Boston.
    4. Neely, Christopher J., 2015. "Unconventional monetary policy had large international effects," Journal of Banking & Finance, Elsevier, vol. 52(C), pages 101-111.
    5. Hancock, Diana & Passmore, Wayne, 2011. "Did the Federal Reserve's MBS purchase program lower mortgage rates?," Journal of Monetary Economics, Elsevier, vol. 58(5), pages 498-514.
    6. Michael D. Bauer & Glenn D. Rudebusch, 2014. "The Signaling Channel for Federal Reserve Bond Purchases," International Journal of Central Banking, International Journal of Central Banking, vol. 10(3), pages 233-289, September.
    7. Michael A. S. Joyce & Ana Lasaosa & Ibrahim Stevens & Matthew Tong, 2011. "The Financial Market Impact of Quantitative Easing in the United Kingdom," International Journal of Central Banking, International Journal of Central Banking, vol. 7(3), pages 113-161, September.
    8. Benjamin Chabot, 2011. "The cost of banking panics in an age before “Too Big to Fail”," Working Paper Series WP-2011-15, Federal Reserve Bank of Chicago.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. King, Thomas B., 2013. "A Portfolio-Balance Approach to the Nominal Term Structure," Working Paper Series WP-2013-18, Federal Reserve Bank of Chicago.

    More about this item

    Keywords

    Federal Reserve; bonds; debts;

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