The bank has money, it lends it to you, and then shortly after it bundles that loan up into an MBS and sells it to the Fed (for a profit).
Repeat step 1.
The Fed - for the last 15 years - usually "expanded its balance sheet" to buy MBSes.
The bank has money, it lends it to you, and then shortly after it bundles that loan up into an MBS and sells it to the Fed (for a profit).
Repeat step 1.
The Fed - for the last 15 years - usually "expanded its balance sheet" to buy MBSes.