Ten years ago, the United States was in a deep financial crisis, with GDP shrinking at the fastest pace in 50 years and the economy losing hundreds of thousands of jobs a month. As a result, the Fed, led by Ben Bernanke, took unprecedented steps for lower interest rates and launched a program of quantitative easing by buying bonds for trillions of dollars.
To illustrate the increase in balance we will only say that it has risen from $ 900bn. to $4.5t.
Balance of the Fed during the years of QE
In justification, the Fed claims that these unconventional political actions have saved the United States from a crisis much worse than the Great Depression, with GDP staying steadily close to 2% over the period.
Many market participants believed that QE would lead to rapid inflation rates, but it remained relatively calm, even at the moment the central bank is experiencing difficulties with low inflation.
US government debt is close to $ 20 trillion, and some fear the bubble may explode after the Federal Reserve has shut down the program for quantitative easing.
Source: Bloomberg Pro Terminal
Jr Trader Petar Milanov
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