[SHOCKING] The Fed Just Gave the Banks $400 Billion in 2 Weeks
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In this video, we’ll be discussing the recent news that the Fed’s balance sheet has increased by almost $400 billion dollars in response to the banking crisis. This news comes just a day after the FOMC rate hike decision of 25 basis points, which was implemented by Fed Chairman, Jerome Powell.
Many people are wondering whether this move is inflationary and whether it’s a sign that a recession is near. To answer those questions, we need to take a closer look at what’s happening.
First, let’s talk about the Fed’s balance sheet. The balance sheet is a record of the Fed’s assets and liabilities. When the Fed buys assets, like Treasury bonds or mortgage-backed securities, it adds them to its balance sheet. This increases the amount of money in circulation, which can be inflationary if it’s not accompanied by corresponding increases in production and output.
The Fed’s balance sheet increased by almost $400 billion dollars in response to the banking crisis. This move was aimed at injecting liquidity into the market to stabilize it and prevent a collapse. While this injection of liquidity could be inflationary in the long run, it’s important to remember that it was a necessary move to prevent a financial meltdown.
Now, let’s talk about the FOMC rate hike decision. The Fed raises interest rates to prevent inflation and to promote economic stability. However, raising interest rates too quickly can also cause a recession by slowing down economic growth. In this case, the Fed raised rates by 25 basis points, which is a relatively small increase.
So, are these signs that a recession is near? It’s difficult to say. While the increase in the Fed’s balance sheet and the rate hike decision could be interpreted as warning signs, it’s important to remember that the economy is still growing, albeit at a slower rate than in previous years.
Overall, it’s important to pay attention to these developments and to keep an eye on indicators of inflation and economic growth. However, it’s also important not to jump to conclusions and to remain calm and patient as the situation develops.
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