The financial press has been speculating about when the Federal Reserve (Fed) will taper asset purchases. When they say “taper,” they mean reducing the rate of increase of asset purchases as opposed to an actual reduction of assets by the Fed as we saw for a brief period in 2018 – 2019. READ MORE
Congress and the Federal Reserve vs. Rational Investors – 3/5/2021
It has become too easy for Congress to borrow trillions of dollars per year. Why should Congress reduce spending or raise taxes when the Federal Reserve will accommodate a higher level of borrowing? READ MORE
Are We Reaching the Limits of Fed Intervention? 1/2/2020
From January 2018 to September 11, 2018, the Federal Reserve steadily reduced its total assets by $670 billion from $4.44 trillion to $3.77 trillion. On September 11, there was a spike in the repurchase (or repo) rate, a key overnight lending rate. READ MORE