Recently the Feds have been discussing on how to exit the stimulus that has been in place since the Great Recession. Seriously, I believe that the method of exit should have been determined a long time ago and the only reason why the method is not conveyed explicitly is because of politics.
As far as I understand, whenever contingency plans are activated for emergency, 99.9% there is already an exit plan in place. This exit plan will be reviewed regularly throughout the whole contingency period.
In fact, if you listen carefully to what the Feds have been saying, they have already been dropping hints on how the stimulus will be withdrawn, such as not selling the assets in their balance sheets and selective purchases of financial assets (e.g. mortgage bonds).
The stimulus exit will most probably not be immediate, and like any contingency planning, it will be gradually phased out. I think that everyone seems to be making a mountain out of a molehill.
No comments:
Post a Comment