Latest / Monetary Policy Explained with Fexingo: Central Banks, Money Supply, and Interest Rates
The Central Bank Balance Sheet Mystery
Lucas and Luna dissect the paradox of modern monetary policy: why central banks are simultaneously shrinking their balance sheets while global liquidity remains record-high. They examine the disconnect between official reserve metrics and the actual cost of capital for corporations, using the Federal Reserve's ongoing quantitative tightening as a case study. The conversation reveals how shadow banking and money market funds have absorbed the shock, creating a hidden layer of liquidity that traditional models miss. Listeners will learn exactly how 'tightening' works when the…
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