24. Federal Reserve · Notable · Needs Congress
Limit future Fed balance sheet expansions to U.S. Treasuries
Printed page 734 24. Federal Reserve
“Limit future balance sheet expansions to U.S. Treasuries. The Federal Reserve should be prohibited from picking winners and losers among asset classes. Above all, this means limiting Federal Reserve interventions in the mortgage-backed securities market.”
What has happened
- Attempted
The Federal Reserve adopted by its own decision the policy the Quote asks Congress to impose, without the limit. The implementation note of October 29, 2025 directs the Open Market Desk that "beginning on December 1, reinvest all principal payments from the Federal Reserve's holdings of agency securities into Treasury bills", replacing the previous instruction to reinvest into Treasury securities matching the outstanding maturity composition only above a $35 billion monthly cap. Every dollar coming out of agency debt and mortgage-backed securities now goes into Treasuries, and the July 2026 implementation note keeps that in force. Nothing prohibits a future Committee from buying other asset classes again, which is the limit Congress was asked to legislate.
Research log
What was searched, and what didn’t count as evidence
Research notes
Leveled attempted under playbook §3b’s rule for a Requires-Congress ask answered by non-legislative action: the reinvestment directive routes around the statutory limit rather than eliminating the authority, so it is attempted and not partial. A Committee decision binds no future Committee.
The same directive is partial for #2014, because that ask is about the existing mortgage-backed securities holdings — which the directive does run down — rather than about a prohibition on future purchases.
- Action
- restrict
- Object
- Federal Reserve open market operations / asset purchases
- ID
- 2012