After weeks of repurchase market operations by the Federal Reserve in response to stress is in the banking system, the Fed took the next step towards launching quantitative easing this week.
Because while the Fed did not come out and openly acknowledge that it has started quantitative easing, consider the following from the Wall Street journal:
“The Federal Reserve will soon increase its purchases of short-term Treasury securities to avoid a recurrence of the unexpected strains experienced in money markets last month, Fed Chairman Jerome Powell said Tuesday.”
And then from Fed Chairman Jerome Powell:
“Indeed, my colleagues and I will soon announce measures to add to the supply of reserves over time.”
So whether the Fed calls that quantitative easing, emergency measures, or tiddliwinks, in the end they’re adding more credit into the system. With perhaps the most alarming part being that Powell apparently feels that what’s already been done has not been enough. And that there’s a need to announce additional measures.
Which seems hard to reconcile with how the Federal Reserve chairman and the president simultaneously tell the public, especially the people who don’t really have time to dig into these things, that everything is normal and nothing’s going on.
Yet that’s becoming harder and harder to believe as reality, and fortunately Bix Weir of RoadtoRoota joined me on the show today to break down what’s really happening. And if you want to understand why we may be on the verge of one of the biggest financial events in the past decade, click to watch the video now!
October 11. 2019