4 ms·
You are largely correct for the pre QE years. But with QE, bonds further out the curve have been purchased by the Fed, and the yields for such maturities have
by jgalt212 2mo ago
You are largely correct for the pre QE years. But with QE, bonds further out the curve have been purchased by the Fed, and the yields for such maturities have been artificially suppressed. Warsh, at on time, really cared about this mispricing of risk. We'll see how he feels now that he's got his hand on the rudder and the orange colored man breathing down his neck.
- quickthrowman 2mo agoThere has been a distinct lack of QE the past few years, here is the Fed’s balance sheet charted: https://www.macrotrends.net/3003/fed-balance-sheet https://www.macrotrends.net/3003/fed-balance-sheet
- jgalt212 2mo agoThey still own 7X the amount bonds they did pre-GFC, and 75% of what they did at the peak. In short, I posit it still has a massive effect on the yield curve and all assets (US and globally).