Tag Archives: federal reserve and monetary policy

Avoiding a Taper Tantrum; The Federal Reserve’s Money Printing/Bond Buying Program, Explained



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Since the start of the pandemic, the Federal Reserve has been engaging in an unlimited bond buying program to sure up struggling companies’ finances. With the economy recovering, the question is whether they should begin tapering these purchases. This could either lead to an enormous negative correction in markets or financial markets regaining independence. Here is what that conversation looks like.


America’s Soaring 2021 Inflation Rates, Explained



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The Federal Reserve is closely monitoring inflation in the United States. After months of loose monetary policy, inflation rates just spiked to 4.2% last month. This leaves the Federal Reserve asking how much of these cost increases are based on inflation versus recovering from the pandemic. Here’s exactly what’s happening.


Clash of the Central Bankers; Yield Curve Control vs. Stimulation, Explained



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With Bond Yields on the rise, the world’s central bankers are being pulled in different directions. The Bank of Japan and European Central Banks are trying to drive down borrowing costs for their governments by controlling the yield curves. America’s Central Bank is focused on getting cash into the hands of America’s banks so they can lend it out. Here is exactly what this ideological conflict looks like.


The Federal Reserve Stimulus Clash, Explained



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Treasury Secretary Steve Mnuchin and Federal Reserve Chairman Jerome Powell are fighting over the future of the Fed’s Main Street Lending Program. This debate has rolled over into the current congressional stimulus debate. Here’s what’s going on with this debate.


The Federal Reserve Bails Out State Budgets 2020, Explained



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For the first time in US history the Federal Reserve is buying municipal bonds from State Governments. This is a temporary fix to keep states solvent, prevent budget cuts, and avoid tax hikes during the economic downturn. Here’s exactly what’s happening.


The Federal Reserve’s New Main Street Lending Program, Explained



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Federal Reserve Chair Jerome Powell is restarting a great depression era program where the Federal Reserve buys bank’s loans to medium sized companies. This program is similar to their bond buying program, but considered to be riskier by analysts. Here’s what’s happening.


The Federal Reserve Goes All In On Liquidity; Unlimited Quantitative Easing and REPO Interventions Explained



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Today the Federal Reserve announced unlimited quantitative easing measures to stimulate liquidity in the markets. This, combined with the Federal Reserve’s actions in the REPO overnight markets, is an attempt to get banks to make more loans to consumers. Here is exactly what’s happening.


A Federal Reserve Emergency Rate Cut and $700 Billion Quantitative Easing Program Explained



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The Federal Reserve just had an emergency session where they cut the Federal Funds rate by 100 points. The federal funds rate is now a quarter of a percentage point. At the same time they have escalated their quantitative easing program to buy five hundred billion dollars worth of Treasury Bills and two hundred billion dollars worth of Mortgage Backed Securities. Here’s what the Federal Reserve hoped would happen, what actually happened, and why it matters.


The Federal Reserve Bails Out REPO Markets for $75 Billion



The Federal Reserve Just engaged in a large bailout of the short term lending REPO market. Here’s exactly what’s going on in this ongoing news story.