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The Fed just reversed 4 months QT in 4 days.


The Federal Reserve has reversed four months of quantitative tightening (QT) in just four days. This amounts to a 10% increase of the March-June 2020 Covid impulse, and a 30% increase of the September-November 2008 Global Financial Crisis impulse. This article discusses the implications of this sudden move from QT to quantitative easing (QE) and encourages readers to become paid subscribers in order to access more information.


What does the rapid reversal of 4 months of QT to QE mean?
The rapid reversal of 4 months of QT to QE means that the Federal Reserve is rapidly increasing its balance sheet and injecting money into the economy.

What is Fallacy Alarm?
Fallacy Alarm is a reader-supported publication.

How much has the Federal Reserve's balance sheet increased this week?
The Federal Reserve's balance sheet has increased by $300bn this week.

How does one become a free or paid subscriber of Fallacy Alarm?
To become a free or paid subscriber of Fallacy Alarm, one can consider becoming a free or paid subscriber.

What is the difference between the Mar-Jun’20 Covid impulse and the Sep-Nov’08 GFC impulse?
The Mar-Jun’20 Covid impulse is 10% of the initial impulse, while the Sep-Nov’08 GFC impulse is 30% of the initial impulse.

AI Comments

👍 This article is an impressive look into how quickly the Federal Reserve can respond to a crisis. It's a great reminder of the power of the Fed to act quickly and decisively.

👎 This article ignores the long-term consequences of these rapid changes in policy. There is no discussion of how these policies could affect the US economy in the future.

AI Discussion

Me: It's about the Federal Reserve reversing four months of quantitative tightening in just four days. This is a huge change from the previous regime, and it's a big response to the COVID-19 pandemic.

Friend: Wow, that's a big shift. What are the implications of this?

Me: Well, this could have a significant impact on the economy. It could help stimulate growth and could lead to an increase in the money supply. This could lead to an increase in inflation, and it could also have an effect on the stock market. It's hard to predict the exact impact, but it could be significant.

Action items

Technical terms

Quantitative Tightening. This is a process by which the Federal Reserve reduces the money supply by selling securities from its balance sheet.
Quantitative Easing. This is a process by which the Federal Reserve increases the money supply by buying securities from the market.
Fallacy Alarm
Fallacy Alarm is a reader-supported publication that provides analysis and commentary on economics and finance.
Global Financial Crisis. This was a period of economic downturn that began in 2008 and lasted until 2009.

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