Monetary Machinations

The Powell Fed has made it clear it will continue purchasing Treasuries and MBS for the foreseeable future and keep short-term rates at rock bottom levels, but will not counter rising long-term rates. This is because financial conditions are loose, and liquidity is plentiful. Moreover, the Fed sees inflation as a transient phenomenon. Finally, slightly higher rates due to improving economic conditions are precisely what the Fed wants.

Recent Posts

Categories