Are Fed actions making headway on filling the hole, or is the hole growing faster than the Fed can shovel as a result of a tsunami of liquidity problems?
“The process by which money is created is so simple that the mind is repelled.” – JK Galbraith
By formally announcing quantitative easing (QE)infinityon March 23, 2020, the Federal Reserve (Fed) is using its entire arsenal of monetary stimulus.Unlimitedpurchases of Treasury securities and mortgage-backed securities for anindefiniteperiod is far more dramatic than anything they did in 2008.The Fed also revived other financial crisis programs like the Term Asset-Backed Securities Loan Facility (TALF) and created a new special purpose vehicle (SPV), allowing them to buy investment-grade corporate bonds and related ETF’s. The purpose of these unprecedented actions is to unfreeze the credit markets, stem…
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