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It’s a sudden expansion of the Fed’s balance sheet. What else would you call it?
by lowkey 4y ago
It’s a sudden expansion of the Fed’s balance sheet. What else would you call it?
- HDThoreaun 4y agoA loan to provide liquidity. QE is the systematic increasing of bond values. These loans will have no effect on bond value and therefore interest rates because they have high interest rates and need to be paid back quickly. They just give debtors enough time to sell a few assets and wait for the situation to calm down.
- lowkey 4y agoSee my edited comment above. The effect is to erase the past 4 months of quantitative tightening in a single week. We can agree not to call it QE but the effect is nonetheless inflationary as with all cases when the Fed creates money out of thin air, thereby diluting the purchasing power of all dollar holders.