Has the Fed Abandoned Risk Assets? | Joseph Wang
Forward Guidance
00:00
The Fed's Reverse Repo Rate
When the Fed does QE, it's increasing the level of reserves in the system. Bank reserves are digital cash. If you are a bank and you have $100 in reserves, you call up the Fed and they'll swap in for $100 in currency. So now we're going to reverse that. Usually that's not good for risk assets because when you have a lot of bank deposits in the system, people go and they kind of rebalance.
Transcript
Play full episode
