The Federal Reserve is on a war footing and it is using the Powell doctrine – only go to war as a last resort, and do so with overwhelming force.
The stunning news that it would buy $300bn (€222bn) in Treasury bonds (and spend a lot more on many other fixed-interest securities) also used another classic military strategy. It had the element of surprise.
Even after the central banks of Japan, Switzerland and the UK bought bonds and successfully pushed down interest rates (“quantitative easing“), and even though the Fed said three months ago that it might buy bonds, nobody expected such a drastic move. Fed officials had downplayed it in recent days.
No comments:
Post a Comment