Minneapolis Fed’s Kocherlakota: QE exposes taxpayers to risk
Narayana Kocherlakota, the president of the Minneapolis Federal Reserve, on Tuesday outlined one consequence of quantitative easing to taxpayers and the economy that is not widely discussed.
Speaking at an event in Fargo, North Dakota, Kocherlakota said that when the Fed buys long-term government debt from the private market, it shifts the burden of interest rate risk from bondholders to taxpayers.
"Quantitative easing is essentially shifting risk from one pocket to another. As a result, the
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