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ls-lah_33 | 3 years ago

Recently the fed has been buying corporate debt etfs[1]. Not an expert, but I assume that must increase the money supply in the general economy? QE also pushes down the interest rate, making it easier for banks to lend to the general public.

I think QE usually doesn't lead to inflation if your employment drops at the same time or your population size is shrinking (i.e. Japan). In such a situation consumer demand decreases, balancing out the additional money supply. As evidence of this notice how QE in the US did not lead to high inflation until employment started picking up.

[1] https://www.investopedia.com/the-fed-s-corporate-bond-portfo...

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