What exactly is the problem with low short term rates?
Other than having interest rates close to 0 and suffering from a liquidity trap/zero bound problem, what's the issue with the Fed artificially keeping rates low? Also what exactly is the problem with an inflated Fed balance sheet? What would happen if say they held onto all their agency MBS and government paper and just let them expire, holding onto the principal they retrieve at maturity?
Bump
This sounds like a Bernie Madoff ponzi.
You're not wrong.
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