Gavin Wendt

As the US Federal Reserve continues with its stimulus program, it might be the Fed itself that's next in line for a bailout. The Fed's bond-buying binge could put the central bank's finances at risk if interest rates were to rise sharply, critics warn. The Fed's balance sheet would swell to more than $4 trillion and as the number gets bigger, the risks also rise. The Fed stands to lose a lot of money, and by a lot of money, I mean hundreds of billions of dollars, said Rep. Mick Mulvaney (R-S.C.), who has raised those concerns with Fed Chairman Ben S. Bernanke. It is not hyperbole to suggest the next big bailout could be of the Federal Reserve. (LA Times)


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