I agree that they have not lowered rates. However as the chart shows they did dramatically increase the Fed’s balance sheet in the past two weeks. They did this in order to facilitate loans to banks who have underwater assets on a mark to market basis.
It would be one thing if they were lending to banks based on the current market value of the assets, but instead they are letting the banks pretend the assets are worth what they would be if held to maturity. So both the Fed and the banks are playing pretend.
We can argue about whether or not this is inflationary. I suppose it would depend on what these funds are used for. It certainly isn’t as inflationary as if the Fed had simply given this money to consumers to spend.
However, I do think it is an error to ignore such a swift reversal of quantitative tightening over the past couple years.
Their stance on interest rates has not changed.
That tweet is someone who doesn’t understand the nuance of the balance sheet.
>As far as I am concerned the Fed is both regulator and PR arm of the banking industry.
They are not helping banks. What are you missing here? Nothing they are doing with rapid rate hikes is advantageous to banks.
>You can take Powell at his word. I remain skeptical.
I’m not, I’m just looking at his actions and the markets priced in probabilities of interest rate changes from the fed.