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IOER is only available to deposit taking banks , whereas TBills are available to everybody. Therefore a holder of TBills cannot simply choose IOER instead in order to get a higher yield. This means that a modest spread can develop between the yields. The Fed’s problem in recent months is to keep all short term rates within the 0-25bp band that is the ...


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Does Adam Smith ... support a Central Bank/Federal Reserve? Adam Smith was firmly in favor of central banking (although not necessarily in the same way as understood today). In Chapter 3 Book 4 of The Wealth of Nations he writes: “In order to remedy the inconvenience to which this disadvantageous exchange must have subjected their merchants, such small ...


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M1 changes changes all the time, depending on activity and reporting intervals. In the US, M1 consists of currency and notes in circulation, plus demand deposits/checking accounts (and other demand-deposit like arrangements). Whenever, a less liquid asset is sold/bought and the money for this transaction is put into/taken out of a checking account M1 ...


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No, the data seems to be off by about a year. The Trading Economics website states that the source of their data is the Federal Reserve. Fed makes its data avaiable via FRED dataset. FRED data show large increase in M1, but not in 2021 but in 2020 as you can see below. The numbers are also bit off between trading economics and FRED data. However, the FRED ...


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If, as part quantitative easing, a central bank buys government bonds, it might affect prices of other assets positively via arbitrage and the so-called portfolio rebalancing effect. There are obviously several factors at play, but I focus on that one. If there is more demand for government bonds via QE, bond prices increase, and their yields fall. Assume ...


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