EconReporter

Quantitative tightening (QT)—a process central banks use to reverse years of liquidity creation from quantitative easing (QE)—is concluding in many advanced economies. The central banks are growing confident that reserve levels in their financial systems are nearing their endpoints. Where are the endpoints of QT and what come next?

"The [Standing Repo Facility (SRF)] rate is set at the top of the FOMC’s target range for the federal funds rate. This combination of an ample supply of reserves and an SRF rate at the top of the target range reduces the day-to-day reliance on the facility except during periods of significant upward pressure on rates resulting from strong liquidity demand or market stress," said John Williams

The faster the credit growth, the worse it is for real growth (output per worker). This is what Stephen G. Cecchetti and Enisse Kharroubi want to explain in their NBER working paper "Why Does Credit Growth Crowd Out Real Economic Growth?"

In their recent working paper "Nonbank Lending", economists Sergey Chernenko, Isil Erel, and Robert Prilmeier provided an insightful overview of the sources and terms of private debt financing during the post-crisis period.

Ricardo Reis, economics professor at the London School of Economics, explained that there were telling signs that the increase in cost of living started ealry-2021 was not a "transitory" phenomenon.

A story about three economists agree with the prevailing consensus that the Phillips Curve of the US is flattened in the last few decades on the one hand; and dispute the idea that the Phillips Curve is dead on the other.

Inflation projections by Fed officials show that PCE inflation will not reach 2% by the end of 2025. Why the Fed expects to cut rate next year then?

Federal Reserve decided to cut rate by an supersized 0.5 percentage point. The decision finally ended the weeks-long market debate of whether the central bank would cut 25 or 50 basis points. One important thing, though, didn't reach the headline: The Fed has never been this "confused" about where the natural rate should be.

The Saturated Level of Reserves or efficient level of reserves, is the point which the opportunity cost for banks to hold reserves disappears, and became indifferent towards holding more reserves. The reserve demand curve beyond this point becomes close to horizontal.

The Bank of Canada on Wednesday decided to hold policy rate at 2.25% unchanged, as expected by markets. However, what is a notable is the Bank continues to show dovish bias given the recent rebound in economic data.