> How would you describe the situation when you purchase a treasury bill then?Your cash (i.e., money) goes to the seller of the treasury bill.
If the seller is a private investor, your cash goes to the private investor (e.g., a mutual fund, a pension plan, an individual).
If the seller is the US Treasury (i.e., you bought a newly issued treasury bill), your cash goes to the US Treasury, which will deposit it, and later on, will use it to pay for the federal government's expenses, including bond interest. (Recall that, unlike the Fed, the Treasury cannot issue newly created money. The Treasury must borrow or collect taxes from the private sector to fund federal spending.)
If the seller is the Fed (through one of its primary dealers, acting as an intermediary), the trade is quantitative tightening.
