Summary
- The Fed’s expansion of its balance sheet, an understandable response to the crisis, needs to be unwound as the economy improves.
- Not only was the Fed buying up most of the new issuance, but it was buying up treasury securities with a maturity far longer than overnight reserves.
- It is worth noting that maintaining large central bank balance sheets do not guarantee robust growth.
Seeking Alpha
by David Beckworth
Jun. 17, 2020