The Four Pillars of Macro with Andy Constan
Excess Returns
00:00
What Is the Reverse Repo Facility?
The only choice for the government, once they run through their extraordinary measures, is to spend that down. That's another strategy, which is if you had built up a big TGA, big checking account,. No, that would have had to be financed by the debt, which hits its ceiling. And so QT literally drains that liquidity. But it really has to be done or else eventually animal spirits will drive this short term deposits into the real economy, generating inflationary pressures.
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