US, WASHINGTON (ORDO NEWS) — The Federal Reserve is again cutting its quantitative easing program. Initially, when the US regulator announced unlimited QE, Treasury purchases were $ 75 billion per day, then the volume was reduced to $ 60 billion. Three weeks ago, the Fed announced a decline to $ 50 billion, and then to $ 30 billion, $ 15 billion and now only $ 10 billion a day.
In addition, the Federal Reserve will lower its purchase of mortgage-backed securities (MBS) this week from an average of $ 15 billion to $ 8 billion per day.
In total, the Fed will buy $ 90 billion worth of securities under QE in a week, which is lower than $ 125 billion a week earlier, but still significantly more than purchases under the program before the current crisis.
Moreover, in just a week, the Federal Reserve will buy more paper than it ever bought in a month, again, when it comes to the period before the onset of the crisis caused by the spread of coronavirus.
As of April 22, the Fed’s balance sheet totaled a record $ 6.57 trillion, $ 205 billion more than the previous week and $ 2.664 trillion more than a year earlier. These are just fantastic numbers, which in theory should mean a colossal depreciation of the dollar.
Recall that in mid-March the financial system was on the verge of collapse, debt markets ceased to function, and the Fed had no choice but to turn on the printing press at full capacity and literally flood the fire with money.
Now the situation is more or less stabilized, and the decisions of the regulator to reduce the volume of purchases look quite logical.
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