new currency in circulation is just one of the side-effects

and that transition is neither direct, nor instant

before these funds effectively become new currency, they flow into financial markets - that's why you see the stock market going up first

the same for risky assets

Illya Gerasymchuk 2025-06-29 13:54

FED swap line operations reach ≈$600 bn

while the swaps are closed/repaid in less than a year, ≈80% of the repayment comes from newly issued wholesale debt

thus, ≈80% of the swap volume eventually becomes new currency in circulation

and then you wonder about inflation 😄