How does the Federal Reserve's buying and selling of securities relate to the borrowing decisions of the federal government?
All monetary policy decisions of the Federal Reserve—including buying and selling securities—are made independently of the borrowing decisions of the federal government and are intended solely to fulfill the mandate set out for the Fed by law: maximum employment and stable prices.
The Fed purchases Treasury securities held by the public through a competitive bidding process. The Fed does not purchase new Treasury securities directly from the U.S. Treasury, and purchases of Treasury securities from the public are not a means of financing the federal deficit.
The federal government borrows from the public by issuing Treasury securities, which are sold at auction according to a schedule that is published quarterly. The Fed does not participate in competitive bidding at Treasury auctions.