As I understand it, quantitative easing is supposed to be viewed as an emergency measure that states use for temporary relief when the markets go into the negative to avoid everything spiraling into a recession. The US is just using QE all the time as a base stimulus, which means they can’t use it in an emergency.
Well, they raised interest rates throughout 2022 until basically the end of 2023, where it topped out at 5.33. It’s dipped about a percentage point now, to 4.48 [1]. So there is some room to keep playing the QE game, in theory. Granted, QE and the FFER aren’t a causal relation here; just a correlation. Lots of folks thought that near-zero or zero interest rate policy would kill the dollar back in the 2007-2008 global financial crisis, but so far, the dollar is still around. Maybe additional QE would kill the dollar. Maybe it won’t make a difference. I honestly don’t know enough to have an educated guess.
Well, they raised interest rates throughout 2022 until basically the end of 2023, where it topped out at 5.33. It’s dipped about a percentage point now, to 4.48 [1]. So there is some room to keep playing the QE game, in theory. Granted, QE and the FFER aren’t a causal relation here; just a correlation. Lots of folks thought that near-zero or zero interest rate policy would kill the dollar back in the 2007-2008 global financial crisis, but so far, the dollar is still around. Maybe additional QE would kill the dollar. Maybe it won’t make a difference. I honestly don’t know enough to have an educated guess.
[1] https://fred.stlouisfed.org/series/FEDFUNDS