Fed Looks to Raise Cash With Its Own Debt Issue

The Federal Reserve’s balance sheet has more than doubled to $2 trillion since August as it’s financed new programs and bailed out ailing businesses, prompting the central bank to weigh issuing its own debt for the first time, reports the Wall Street Journal. The Fed, looking for new tools to address the crisis, already has begun talks with Congress.

While the issuance of debt generally is the province of the Treasury Department, the central bank can print all the money it needs. That could create problems down the road as the economy recovers, causing inflation. "Finding alternative funding vehicles that bypass the banking system would be a more effective way to support the US credit system," one economist tells the Journal.
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