Macro Musings with David Beckworth cover image

Nathan Tankus on the Future of MMT and How to Avoid U.S. Debt Default

Macro Musings with David Beckworth

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The Fed's Thinking About Debt Fed Bills

The Federal Reserve was thinking about this and there's a memo they wrote, but you also mentioned a speech that Janet Yellen gave in 2009. They were actually worried about their balance to getting too big. The sale of Fed Bills would reduce the reserves of the banking system as in a typical contractionary open market operation. As with interest on reserves, we could accomplish a tightening of policy while maintaining our support of credit markets.

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