The Fed's Balance Sheet Jumped $300B Last Week. Is That Inflationary?
The Breakdown
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The Transmission Mechanism for the Fed to Be Inflationary
The transmission mechanism for this sort of balance sheet expansion to become inflation would be these banks who are getting this money, getting this sort of cash for their collateral. That is in your estimation and what we're seeing. What's happening is that this money is being used to cover liquidity shortfalls where those deposits are leaving. And so that suggests that it's unlikely for that to switch in any short order.
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Transcript
