The Big Unwind

When in 2014 the Federal Reserve Bank’s Chairman Janet Yellen stopped Ben Bernanke’s  three rounds of Quantitive Easings that had held the Obama economy’s lhead above water ... and had expanded the Fed’s balance sheet by 3.6 trillion dollars, we were assured by Bernanke that this excess liquidity in its balance sheet could be unwound without any consequence ... see: Bernanke Plan.

Unfortunately, he was dead wrong. When this process was eventually started and before the Fed had reduced its balance sheet by $500 billion (mostly under Trump), it has had to reverse itself and pump about this same amount of liquidity back into the economy ... due to soaring repo rates.

So much for an august Princeton economics professor’s understanding of economics!