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As those bonds mature, the Fed is continually buying more to keep their balance relatively constant. Nothing is "over" until they manage to withdraw all that ex
by ef4 11y ago
As those bonds mature, the Fed is continually buying more to keep their balance relatively constant. Nothing is "over" until they manage to withdraw all that extra liquidity.
Which is the tricky part.
- refurb 11y agoExactly! It's happened in the past. Inflation starts to creep up, but the economy is still lagging. The Fed is then stuck between reining in inflation and potentially stunting future growth. Pull back too late and you end up with the Carter years: mediocre growth and an inflation in the teens.