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by RC_ITR 1360 days ago
Wait, it's really hard to follow you here.

The Fed reduces liquidity by receiving coupon payments? So then, unless it's growing its balance sheet by the amount of those payments (i.e. returning that cash to market), it's removing liquidity?

Interesting take, I like the moxy.

EDIT: You have QE/QT backwards. QE increases the money the Treasury sends to the Fed as coupon, which you said removes liquidity.

My entire point was that you are backwards in one of your two conflicting arguments.
1 comments
wbsss4412 1360 days ago
> Quantitative easing (QE) is a monetary policy whereby a central bank purchases predetermined amounts of government bonds or other financial assets (e.g., municipal bonds, corporate bonds, stocks, etc.) in order to inject money into the economy to expand economic activity.

[0] https://en.wikipedia.org/wiki/Quantitative_easing?wprov=sfti...

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RC_ITR 1360 days ago
Yes. Would you beleive I agree with that (maybe you would if you actually read your own comments)

You stated that receiving coupon payments from the Treasury reduces liquidity. How? I don’t know. But you said it.

Buying more Treasuries makes the fed receive larger coupon payments. Are you saying that process reduces liquidity?

That’s my only question.

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