I'm currently taking the "Economics of Money and Banking" course on coursera [0] and, as far as my understanding has developed, the Fed injecting cash is not an irreversible thing.
When the liquidity crunch is over, the Fed will start gradually increasing the rate. That will make rolling over existing overnight loans taken from the Fed less attractive and a lot of money will flow back to the Fed.
I hope people more familiar with the subject will correct me if I'm wrong.
When the liquidity crunch is over, the Fed will start gradually increasing the rate. That will make rolling over existing overnight loans taken from the Fed less attractive and a lot of money will flow back to the Fed.
I hope people more familiar with the subject will correct me if I'm wrong.
[0]: https://www.coursera.org/learn/money-banking