The Bitcoin Layer
Stanford Professor: Fed Is Scared Of REPO CRISIS
Jun 6, 2024
The podcast delves into the complexities of Fed policy rates, the repo market, and wholesale repo funding. It highlights how the Fed may use Fedwire payments as a sign of reserve scarcity. This episode is a must-listen for those keen on understanding monetary plumbing and Fed policy mechanics.
38:15
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Quick takeaways
- Wholesale repo funding is crucial for financial plumbing, reserve scarcity can be monitored through Fedwire timing.
- Quantitative easing and tightening influence financial behavior, managing securities aims to lower interest rates and stimulate economy.
Deep dives
The Fed's Approach to Inflation and QT
The podcast discusses a Stanford Business School professor's opinion piece on the Federal Reserve's handling of inflation and quantitative tightening (QT). Despite high inflation rates, the Fed has been reducing its balance sheet. The author criticizes the Fed's decision to slow QT and explains the delicate balance between the Fed's assets and liabilities, such as treasury securities and cash reserves.
