Tag: money printing

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An Innocent Question Re: Fed Balance Sheet Expansion and Deflation

This is a follow-up to “24/7 Money Printing at the Fed? Misconceptions and Consequences.“

For a longer list of monetary / macro-related notes, please see the most recent related note here.

My prior note argues that the Fed is not currently engaged in “money printing” in the physical sense. What the Fed is actually doing is more like money transformation, which is carried out by converting mostly treasuries and bonds (which the Fed does not consider as “money”) into cash.… Read the rest “An Innocent Question Re: Fed Balance Sheet Expansion and Deflation”

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24/7 Money Printing at the Fed? Misconceptions and Consequences.

The US Federal Reserve balance sheet is expanding at an unprecedented pace.

If investors thought 2008-2018 was extraordinary enough due to a decade of near-zero Fed fund / interest rates, the last 3 months can only be described as absolutely absurd.

This chart shows the Fed’s balance sheet in trillions of USD:

In <6 months, the Fed expanded the balance sheet by ~$3 trillion (from $4 trillion to $7 trillion).… Read the rest “24/7 Money Printing at the Fed? Misconceptions and Consequences.”