Yesterday from Fed Chairman Powell…
Federal Reserve Chairman Jerome Powell said Wednesday the central bank would fight the next economic downturn by buying large amounts of government debt to drive down long-term interest rates, a strategy that has been dubbed quantitative easing, or QE.
Of course, they will. The fix is always in, isn’t it? Wouldn’t want to let a system and associated economy so far out on a brittle limb weighed down by exponential debt leverage go it on its own, now would we? Wouldn’t want anything like a naturally functioning economy because until an utter and complete crash and clean out, there can be no such thing. So more debt manipulation it is!
“We will use those tools — I believe we will use them aggressively should the need arise to do so,” Powell said.
The Fed has traditionally been able to slash interest rates to fight a recession often by as much as 5 percentage points. But that’s impossible now because the Fed’s benchmark rate is currently in a range of 1.5%-1.75%.
“We will have less room to cut,” Powell said.
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