[quote=XBoxBoy][quote=Rich Toscano]
(Check today’s admission that the FOMC will engage in further QE for the latest exhibit).
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I’m assuming you’re referring to the fed’s announcement that they will reinvest principle from treasuries and other securities that have matured and been paid off. How is that quantitative easing? I thought quantitative easing was when the fed printed (created) new money and bought assets with newly created money. If they receive money for maturing securities and then reinvest that money where is the QE? If that’s not what you’re referring to then I’m curious, what policy are you referring to?[/quote]
Yes, you are correct, I was being sloppy in my use of the term.
Definitional quibbles aside, you are right that this does not itself increase their money printing. There was to be an implicit tightening as they let the maturing MBS mature; now they are preventing that tightening. So this is not an actual expansion of their balance sheet, but it is a loosening of policy compared to what they had previously said they would do.
Whatever you call it, I think it still supports the point I was trying to make…
