> in possession of a mystical lever, a single number that they can change to steer the behavior
Federal Reserve has more than one lever. They set bank reserve ratios. They engage in outright buying of underwater (mispriced) paper through quantitative easing. They created a new program this year to swap SVB's mispriced bond holdings at par.
It's time to reel in Federal Reserve and reel in government deficit spending.
Federal Reserve has more than one lever. They set bank reserve ratios. They engage in outright buying of underwater (mispriced) paper through quantitative easing. They created a new program this year to swap SVB's mispriced bond holdings at par. It's time to reel in Federal Reserve and reel in government deficit spending.