Beginning in October 2019, the Federal Reserve started buying $60 billion a month of treasury bills, which are short-term government obligations. Because the bills are short-lived, the Federal Reserve has been adamant that this new program is not QE4.
Is the changing Fed story something that should concern you, or is it just growing pains adapting to the massive balance sheet inherited from the unconventional policy QE?
The bigger a central bank’s balance sheet is, the more the government is involved in the production of money, and the less capitalistic an economy becomes.
Even though an inverted yield curve has just about a perfect record of predicting recessions, some believe that, because of the Federal Reserve’s unprecedented involvement in the economy, this time it will be different.