The Fed. Reserve indicated they will use the proceeds of the MBS program to purchase treasuries.
I have been thinking about this since I heard it. Combed the media outlets last night, to get multiple opinions on it, but I am still scratching my head.
In the current environment, I just do not see the need for them to do this. There has been healthy demand for US treasuries, I do not see why they would add on-top of the already excess demand. (Or even create more demand by making that statement.)
Ben B. is not a stupid man. Especially after his first few months in the head of the Fed. Everything they do is calculated, and has a purpose. IMO, he has earned that reputation since taking leadership of this crisis.
So why would they make a statement like that?