Federal Reserve lent $300B in emergency funds to banks in the past week

Re:Federal Reserve lent $300B in emergency funds to banks in... by lazide on Sunday March 19, 2023 @09:26PM (#35226065)

QE had a big impact on inflation because creating loans typically requires a willing buyer/underwriter at a given rate.

When the gov’t is willing to buy/underwrite loans with minimal standards or sight unseen at lower rates, it artificially accelerates loans and lowers the cost of money - and increases the money supply and velocity of money in the economy.

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Re:Federal Reserve lent $300B in emergency funds to banks in... by dools on Sunday March 19, 2023 @10:42PM (#35226643)

"The most extreme growth occurred in September 2001, January 2009, and January 2012, when the rate of M2 expansion topped 10%. These accelerated periods coincided with recessions and economic weakness, during which expansionary monetary policy was deployed by the central bank."[0]

This expasionary monetary policy failed to stimulate the economy, which is predictable to anyone who understands that banks having bonds vs reserves has virtually no impact on their lending behaviour. Bonds are, for all intents and purposes, as good as cash.

[0] https://www.investopedia.com/terms/m/m2.asp#toc-the-bottom-l...

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