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No, because bank reserves can go up. And by increasing its interest rates, the Fed reserve is encouraging banks to put more money in reserve accounts.
by ummonk 4y ago
No, because bank reserves can go up. And by increasing its interest rates, the Fed reserve is encouraging banks to put more money in reserve accounts.
- neilwilson 4y agoBank reserves cannot go up in aggregate unless government spends more than it taxes and doesn't issue bonds to drain those reserves. Bank reserves are on the asset side of the bank's balance sheet. Deposits are on the liability side.