A discussion paper published by the US Federal Reserve Board examining the historical composition of the Fed’s balance sheet has found “a statistically significant effect” on interest rates.
In their paper, The Federal Reserve’s Portfolio and its Effect on Interest Rates, Jeffrey Huther, Jane Ihrig and Elizabeth Klee use data from 1985 to 2016 to show that the divergence of the composition of the Fed’s portfolio from overall Treasury securities outstanding is associated with the effect on inter
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