Fed may adopt yield-curve caps, ex-chairs Bernanke, Yellen say

Bloomberg/Rich Miller and Maeve Sheehy

illustration of Fed lowering interest rates“Former Fed Chairs Ben Bernanke and Janet Yellen warned that the U.S. economic recovery from the coronavirus shock could be slow and uneven and said the central bank may opt to cap yields on Treasury securities to help it along.”

USAGOLD note: Mentioned by the right people in the right place and at the right time, many will see this as an informal announcement of an important policy change. It will surely intensify the debate that has been going on rather quietly up until now. In order to execute the policy, the Fed is likely to broaden and escalate its bond-buyer-of-last-resort function to keep rates down.

Repost from 7-19-2020

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