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Is there that big a difference between inflating stock prices the way the BOJ does and depressing bond yields through "normal QE" (which amounts to buying bonds
by _yosefk 10y ago
Is there that big a difference between inflating stock prices the way the BOJ does and depressing bond yields through "normal QE" (which amounts to buying bonds, thus inflating their prices)? Depressing bond yields distorts the market in the sense of encouraging risky investment/"risk mispricing", and then indirectly it inflates stock prices as investors' safe alternatives now yield less income.
- Symmetry 10y agoIt does change the availability of low-prices debt but so would the government failing to issue debt in the first place. In both cases there's less distortion than if the government starts blessing specific stocks.