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I know very little about economics, but If there is no net injection into the market, why did the Fed's balance sheet start to expand at the same time? Are they
by sputknick 7y ago
I know very little about economics, but If there is no net injection into the market, why did the Fed's balance sheet start to expand at the same time? Are they separate things and this is a coincidence?
https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm https://www.federalreserve.gov/monetarypolicy/bst_recenttren...
- hcknwscommenter 7y agoThey are not separate things. It is not a coincidence. However, you are not taking into account the very real difference in the composition of the balance sheet. Buying a short-term risk free instrument (and thereby expanding the balance sheet) in order to increase liquidity in that market is very different from what was happening during QE.