Killy_Mel

DATA VIEW (NOT A FORECAST): REAL SIZE OF FED STIMULUS

QUANDL:FRED/WSHOTS   FRED/WSHOTS
Despite all the hype raised about fed printing 3.5 trillion USD during times of economic stimulus, the real amout of help to economy is much smaller - it is approximately 1 trillion USD

The rest of "printed" money is held at the Fed or traded on federal funds market by the recipients of the stimulus (key US financial institutions, who received reserve balances for their MBS             or Treasuries)

Apparently, recipients are unwilling to lend out the full amount of stimulus to the economy; they prefer to receive fixed guaranteed rate on excess reserves at the Fed (0.25%) or to lend them out at federal funds market (at approximately 0.14%) on overnight basis.

Is it some kind of plot to keep inflation at bey, while making an impression on financial markets? Ask Yellen!=)
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