5 ms·

Even if it's transitory, what's the reason to keep injecting cash _today_ via buying agency mbs and other securities?

• adam_arthur 5y ago
  Because Powell wants to get reappointed. It really has to be that. There's no other logical/sane justification for it. Fed is monetizing govt deficit spending and artificially suppressing long term rates to support asset prices to make things look good in the short term. On a risk adjusted basis, it's obviously awful policy.
  • mywittyname 5y ago
    Powell should have never been appointed. The only reason he was is that Yellen was recommending a raising of interest rates in 2018 and the sitting president was worry about the optics of that going into reelection. In comes Powell, the man willing to kick that can down the road. Raising interest rates was the right move in 2018. It's just that the economic benefits of doing such takes a few years to pay off.