The Fed added $2.5 billion to the financial system today. This outright coupon purchase creates new money for banks to lend. The further effect is to make equities more attractive as investors avoid competing with the Fed in the bond market.
In another report, many banks have lowered their credit standards in an effort to lend and revive the economy. Borrowers, however, are not requesting these loans. We will have to depend on our stronger manufacturing sector to stimulate growth.
1 comment:
"[reconstructed] M3 continues its uptrend from a bottom about 5 weeks ago, M2 is growing faster (up to 2.5% YoY growth from about 1% a few months ago), and M1 is growing YoY at over 5%." - NowandFutures
Post a Comment