Secrets of the Federal Reserve’s Unconventional Monetary Policy (Advanced Level) | William English

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Forward Guidance is sponsored by VanEck. Learn more about the VanEck Morningstar Wide MOAT ETF (MOAT) at https://vaneck.com/MOATFG.

William English’s work at the Yale Program on Financial Stability: https://som.yale.edu/faculty-research/faculty-directory/william-b-english
William English’s co-authored new book, “Monetary Policy Responses to Post-Pandemic Inflation”: https://cepr.org/about/news/press-release-new-cepr-ebook-monetary-policy...
William English’s co-authored Chapter on the Fed’s Balance Sheet: https://www.elgaronline.com/edcollchap/book/9781800375321/book-part-9781...
William English’s 2012 paper on the rationale and effects of QE: https://www.federalreserve.gov/econres/feds/the-federal-reserve39s-large...
“Interest Rate Risk and Bank Equity Valuations”: https://www.federalreserve.gov/econres/feds/interest-rate-risks-and-bank...

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Timestamps:
00:00 Introduction
01:31 Fiscal Policy & Monetary Policy Never Really Were Separated. But It Would Nice If They Were
03:49 Do High Interest Rates Dissuade Government Borrowing?
07:09 The Fed Doesn't Like To Discuss Fiscal Policy
09:53 The Fed's Balance Sheet Expansion of 2020 & 2021
13:57 The Effects of Quantitative Easing (QE), In Theory And Practice
18:59 I Don't Remember Us (The Fed) Thinking A Lot About Negative Interest Rate Policy (NIRP)
23:41 VanEck Ad
24:22 The October 2008 Decision To Allow The Fed To Pay Interest On Reserves Assisted the Implementation of Quantitative Easing (QE), Which Began ~1 Month Later
29:15 The Striking Thing About The Asset Purchases Was The Size"
32:32 Forward Guidance vs. QE: Which Is More Powerful, And Which Has More Knock-on Effects?
36:27 Forward Guidance Is More Powerful When Initial Market Expectations About Future Policy Rates Are Incorrect
44:37 Flexible Average Inflation Targeting (FAIT) Framework Adopted By The Fed In 2020
52:48 Fast QE & Slow QT = Secular Rise In Size of Fed Balance Sheet
57:27 Fed's Decision To Slow Pace of QT Was Due To Desire To Avoid a "Snafu" In Money Markets Such As In September 2019
01:02:36 The Bernanke Doctrine: Should Interest Rate Policy & Balance Sheet Policy Always Be Pointed In The Same Direction?
01:07:12 If Balance Sheet Policy Is Moving The Opposite Direction Of Interest Rate Policy, Does That Weaken The Signaling Impact Of Balance Sheet Policy?
01:11:50 Lowest Comfortable Level of Reserves (LCLoR)
01:19:34 Impact Of Interest Rate Movements On Bank Equity Valuations
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Disclaimer: Nothing discussed on Forward Guidance should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.

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