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20-10-2018, 04:38 PM
The fed in my opinion is still quite accommodative. If it really wants to tighten liquidity, the easiest way would be to quicken its balance sheet reduction rate. At the moment, it is reducing it by US 50 billion per month. With a balance sheet of US$ 4.2 trillion, its going to take awfully slow to reduce it to pre-crisis level of below 1 trillion.
I will tell Trump ok I wont increase interest rates but i will double the de-leveraging rate from US$50 billlion to US $100 billion per month.
I will tell Trump ok I wont increase interest rates but i will double the de-leveraging rate from US$50 billlion to US $100 billion per month.