/1
...pursuant to prior myths (
"the money multiplier...is anchored in an obsolete explanation of how the Fed operates and influences banks"
research.stlouisfed.org/publications/p…
...pursuant to prior myths (
https://twitter.com/AnthPB/status/1478791486573535236?t=ichxEptRC0s_-7PIzZbFgQ&s=19), here's another misunderstanding debunked – most recently by the Fed itself (2021):
"the money multiplier...is anchored in an obsolete explanation of how the Fed operates and influences banks"
research.stlouisfed.org/publications/p…
/2
...money multiplier obsoletion TLDR:
· (fractional) reserve rates were a thing until GFC 2008, and obsoletion redoubled during COVID 2020 when reserve requirements were suspended/lowered to zero
· since reserves are now abundant, POMOs and SOMAs can't influence FFR anymore
...money multiplier obsoletion TLDR:
· (fractional) reserve rates were a thing until GFC 2008, and obsoletion redoubled during COVID 2020 when reserve requirements were suspended/lowered to zero
· since reserves are now abundant, POMOs and SOMAs can't influence FFR anymore
/3
...money multiplier myths (cont'd):
· in the Fed's modern "ample-reserves regime... IORB serves as a reservation rate, and affects market interest rates [via arb]...influences banks' decisionmaking about setting deposit and loan rates...lending and investment"
#ioer #iorr
...money multiplier myths (cont'd):
· in the Fed's modern "ample-reserves regime... IORB serves as a reservation rate, and affects market interest rates [via arb]...influences banks' decisionmaking about setting deposit and loan rates...lending and investment"
#ioer #iorr
...that was quick:
"SBF [bailing out crypto rn e.g. Blockfi and Voyager Digital] is basically cosplaying JP Morgan in the Panic of 1907"
"SBF [bailing out crypto rn e.g. Blockfi and Voyager Digital] is basically cosplaying JP Morgan in the Panic of 1907"
https://twitter.com/modestproposal1/status/1539375528246910976?t=IV4L7s959pn4Xy8kC6q-uw&s=19#FTX
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