WSJ people were out reporting this yesterday… how could inflationista morons complain about this? “UNprinting money!”…. “Quantitative Tightening!”….
Maybe they just leave the policy rate alone for now and reduce USD system reserve balance to try to preserve any technical credibility… QTM/monetarist abstraction reification morons should applaud this… “less money!”…
Fed governor Christopher Waller, who last month described inflation as “alarmingly high,” said shrinking the asset portfolio faster would offer a way to tighten policy without requiring even more aggressive interest-rate increases. “I don’t see any reason to delay,” he added.
✉️ Newsletter: Fed Officials Consider Reducing Asset Portfolio as Tightening Tool https://t.co/QHEcHqrOY6
— WSJ Central Banks (@WSJCentralBanks) January 4, 2022
5 comments:
They won't leave the policy rate alone. They will raise it. They are diehard monetarists who believe their credibility is at stake unless they "squash" inflation by raising rates.
And if they do reduce reserves, it will unleash a lending boom by the banks. Household indebtedness and debt service burdens will rise rapidly. This will create a very shaky economic foundation.
Where in QTM is interest rate?
Friedman: “ inflation is always a monetary phenomenon “
Where does the rate fit in there?
Doesn’t….
Where do these morons get their obsession with the rate?
If you look at these morons the whole time they are “they’re printin money! They’re debasing! “
Well ok…
Now after all of that, they say ‘they have raise the rates!”.. “leave the money supply alone!”
Huh? Whut?
30 day Tsy already at 0.05% and RRP at 0.05% up from 0.01%
So they are having to match 30 day Tsy rate… to get people to go over there to RRP…
How long will RRP participation continue?
At some point those mutual funds might abandon the RRP … which would be catastrophic…
FED might have to first bring system balances down to point where RRP goes to zero before they can raise…
Or they are going to have to continually increase the amount they pay at the RRP (if they can) to equal short term Tsy rates…
Maybe they can…
Post a Comment