The Federal Reserve buys and sells stocks
The Federal Reserve does not buy and sell stocks; its open market operations and asset purchases are limited to government-backed debt instruments such as Treasury securities and agency mortgage-backed securities.
The retrieved literature consistently shows that the Federal Reserve conducts open market operations and balance-sheet policies involving Treasury securities, federal agency securities, and mortgage-backed securities, rather than equities or stocks. Therefore, the claim is refuted by the standard tools and mandate of the central bank.
Cheryl L. Edwards. Open Market Operations in the 1990s. 1997. https://doi.org/10.17016/bulletin.1997.83-11
The Federal Reserve's open market operations involve the purchase and sale of Treasury and federal agency securities, not corporate stocks.
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Bateman W. The Fiscal Fed. 2023. https://doi.org/10.2139/ssrn.4516824
The historical fiscal functions of the Federal Reserve center on large-scale debt purchase programs and Treasury debt markets rather than equities.
Fleming MJ, Liu H, Podjasek R, Schurmeier J. The Federal Reserve’s Market Functioning Purchases. 2022. https://doi.org/10.2139/ssrn.4155654
Market functioning purchases by the Federal Reserve are specifically focused on U.S. Treasury securities and agency mortgage-backed securities to stabilize debt markets.
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