Fed Allows Bank Dividends and Buybacks

The Fed allows banks to buy back shares and issue dividends amounting to $128 billion from July 2021 onwards. Consider the following. A buyback uses cash on the balance sheet of a company to buy back shares, dissolving them and pushing the share price higher. That cash comes into the hands of shareholders and will start flowing into the economy. This in effect is a stimulus to the economy and pushes up asset and consumer prices.