Terrifying when you think about it! Former World Bank President David Malpass criticized the Federal Reserve, saying it has turned into a 'giant hedge fund.' It borrows money from banks at high interest rates (5.4%) Then buys low-yield government bonds, Resulting in accumulated losses of over $1 trillion (and still growing). This is essentially a negative interest rate spread trade. This operation creates the illusion of 'persistently low interest rates,' Encouraging excessive government borrowing (especially short-term Treasury bonds), Distorting the real fiscal situation and jeopardizing the status of the US dollar. He believes the Fed's massive balance sheet is crowding out private sector funds. Capital that should have been used for startups, loans, and small business development is being locked up, hindering economic growth. He warns that this scheme isn’t limited to the US but is happening in central banks around the world.