|
| It's not really printed in the way QE is. The banks pledge a bond (underwater bond) and the fed lends them face value. Since the bond is underwater, the unrealized market loss shows on the Fed's balance sheet instead of the bank's.
I imagine the added liquidity could have similiar effects but also important differences. 2 big differences from regular QE are A. Not buying on the open market so not artificially lowering bond yields. B. the banks are borrowing money (that needs to be repaid) from the fed at either 4.75% or 5.25% against a bond yielding lower. Obviously just a band aid.
Certainly adds short term liquidity like QE does. But there are important differences.
I wonder how many of these loans will not be repaid by future failed banks... | |
|
we have our answer I think on interest rate moves
