Forget QT - the Fed will boost stocks as balance sheet to top $16 trillion

  • 📰 BusinessInsider
  • ⏱ Reading Time:
  • 46 sec. here
  • 2 min. at publisher
  • 📊 Quality Score:
  • News: 22%
  • Publisher: 51%

Business Business Headlines News

Forget quantitative tightening - the Fed will double its balance sheet to over $16 trillion, boosting stocks

plan, which would roll back prior stimulus by shrinking the Fed's balance sheet. Instead, the Fed will return to its quantitative easing scheme, lifting stocks in the process, he added.

Howell noted that the Fed and other central banks earlier this year plowed liquidity into the global financial system during this spring's"But in coming years they will probably have to bailout debt-burdened governments, too," he warned. That's as developed economies are being faced with fresh pressure to expand public spending, as a renewed focus on military requirements and changing demographics weigh on budgets, he explained.

According to Congressional Budget Office estimates cited by Howell, the Fed's Treasury holdings would have to rise to $7.5 trillion by 2033 from nearly $5 trillion today."More realistic numbers point to required Fed Treasury holdings of at least $10 trillion. That translates pro rata into a doubling of its current $8.5 trillion balance sheet size and will mean several years of double-digit growth in Fed liquidity," he wrote.

 

Thank you for your comment. Your comment will be published after being reviewed.
Please try again later.
We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:

 /  🏆 729. in BUSÄ°NESS

Business Business Latest News, Business Business Headlines