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Comment by kp98 | Hacker News Reader

That would be the massive amount of QE & money injected into the system. I doubt next recession it will be so simple to sell the bonds we need to to run a massive QU campaign again

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Hasn't the Fed mostly rollbed back the QE by selling off the assets they bought?

Looking at Fed total assets [0], the Fed's sold off only a fraction of what it took on during the crisis and QE.

[0] Fed total assets from FRED: https://fred.stlouisfed.org/series/WALCL

Wow, no kidding. I wonder how the mix has changed? Obviously I was wondering about overall going down, but I seem to recall there being like a change of short for long term assets or something?

The fed purchased long term assets like mortgage backed securities to provide liquidity and relief to corporations that held too much bad debt on their balance sheets. This provided immediate relief for distressed institutions.

The fed also expanded the balance sheet by selling long term bonds, which offered relatively lower rates in comparison to short term notes and bills, this provided the cash infusion needed for QE to stimulate the economy.

The fed’s balance sheet went from roughly 4 t down to I think ? 3.5 T and now it’s ramping up again at the top of cycle + lending hundreds of billions a month to banks in the repo markets. Given the pace we’re going at now I doubt we’ll be able to sustain the pace in a recession

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