The Fed's New Balance Sheet
The Fed's New Balance Sheet
Excellent analysis of the fed's balance sheet since the financial crisis, and concerns it raises.
"I would suggest first that the new Fed balance sheet represents a fundamental transformation of the role of the central bank."
"A second concern I have with the new Fed balance sheet is that it has seriously compromised the independence of the central bank."
"My third concern is that the new Fed balance sheet has handicapped the Fed's ability to fulfill its primary mission, which I see as promoting a stable and predictable low rate of inflation."
"I recommend instead that the Fed should be buying Treasury Inflation-Protected Securities in the current situation. Tim Iacono says that's like the Mafia buying 'protection' from itself. But my point is that TIPS represent an asset that would gain in value at a time the Fed needs to sell them, meaning that the logistical ability of the Fed to drain reserves quickly in such circumstances is without question."
Excellent analysis of the fed's balance sheet since the financial crisis, and concerns it raises.
"I would suggest first that the new Fed balance sheet represents a fundamental transformation of the role of the central bank."
"A second concern I have with the new Fed balance sheet is that it has seriously compromised the independence of the central bank."
"My third concern is that the new Fed balance sheet has handicapped the Fed's ability to fulfill its primary mission, which I see as promoting a stable and predictable low rate of inflation."
"I recommend instead that the Fed should be buying Treasury Inflation-Protected Securities in the current situation. Tim Iacono says that's like the Mafia buying 'protection' from itself. But my point is that TIPS represent an asset that would gain in value at a time the Fed needs to sell them, meaning that the logistical ability of the Fed to drain reserves quickly in such circumstances is without question."
posted by Han at 3:05 PM
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