Fed Chair Janet Yellen said Friday that she is “extremely confident” the Fed will be able to continue to run its $3.5 trillion cash-and-carry operations for a year.
She was responding to a question about the Fed’s efforts to raise cash from the markets as its balance sheet shrinks and as it looks to refinance the trillions of dollars of mortgages and other debts.
Yellen’s comments came in response to a tweet by Federal Reserve President Jerome Powell, who wrote: “The Fed is fully supportive of this plan to spend more cash on the economy.
This is a time when we should be spending more cash and the Fed has already committed to spend a total of $3tn on the US economy.”
Yellen had previously told reporters that the Fed is working on plans to reflate the $3trillion in the US national debt, and she said that there were other initiatives in place to help address the financial situation.
Powell also noted that “we are committed to supporting the economy and addressing the long-term debt, so that the U.S. can continue to grow in the future.”
In other words, Yellen was encouraging the Fed to continue using money to invest in the economy, despite the fact that it is currently being forced to reduce the amount of money it is able to lend out.
Yelling about the economy As Powell and Yellen discussed the possibility of using money in the market, a question came up about whether the Fed would be able “to continue to use its magic formula” to make money available to the economy as it tries to refloat the massive amounts of debt it has accumulated.
Yellings answer was a categorical no.
The Fed has been doing its best to avoid using its magic formulas.
Yelled Yellen: “No, no, no.
No magic formula.
And the Fed said that, if it were to use it, it would only use the money it can make available to help the economy grow.
But Yellen, who was also responding to the question about how the Fed could continue to reflow the debt, said that it would be wrong to say that the “magic formula” was “stale.”
She added that it was not a “magic” formula that the economy needed, but a “normal” one that the central bank could use.
She said that the magic formula had been used before, “and it worked.
And we have used it before.
But the question is: What does the magic look like now?”
She said the Fed had used it in the past to support the economy when it needed to borrow money.
And she said she believed that this time would be different.
Yettens response to Powell: “What is different now is that it’s a different economy.
The economy is changing.
We’ve seen a lot of volatility, a lot more volatility in the last month.
We haven’t seen this kind of volatility in our history.”
She said it was “highly unlikely” that the financial markets would experience any major volatility during the next year.
But she also said that she believed the economy would grow in 2018.
Yells out about the US and Europe The Fed is facing a growing financial market in Europe.
In Europe, the Federal Funds Rate (FRB) is currently near zero, and in the U