The Federal Reserve’s chair Jay Powell has been at pains to point out recent bloating of the bank’s balance sheet does not constitute fresh quantitative easing. Chart, via FRED:
Powell’s Fed views the expansion, which comes as the result of its purchases of short-term t-bills, as a consequence of its attempts to lower short-term money market rates. The purchases are intended to prevent a repeat of the spike seen in repo markets towards the back end of last year when the overnight rate soared to 10 per cent.
There are 2116 words left in this subscriber-only article.