Re:FDIC Takes over Silicon Valley Bank
by grey-area on Saturday March 11, 2023 @07:22AM
(#35107699)
Sure it is their job to set interest rates. It is far less clear that it is their job to buy government and corporate debt, and allow the government to issue unprecedented amounts if debt. Or to attempt to completely erase the business cycle.
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Re:FDIC Takes over Silicon Valley Bank
by NovemberWhiskey on Saturday March 11, 2023 @12:22PM
(#35110436)
That would be the Fed pursuing the "maintain the stability of financial markets and contain their systemic risks" part of its statutory purpose.
From current evidence, their efforts seem to have had the opposite effect. Please try again to justify post-hoc these actions which the fed has never before undertaken (qe and zirp and even buying corp bonds).
Covid would have forced a much harder reset, probably in 2021.
Covid came at the end of a decade of QE. They tried QT in 2019 before Covid hit and had to give up.
QE and ZIRP is the original sin here which created the dilemma the fed now faces - hard inflation or hard recession. They didn’t solve the GFC or Covid, they just postponed the impact and made it far worse.
I have absolutely no objection to counter-cyclical monetary policy but the monetary policy has become the cycle.