In my latest Sound Money Project column, I talk about the issue of central banks’ deficits, a problem well-known in my home country: Argentina. A situation that is now facing the Fed. The Federal Reserve faced an unprecedented challenge in September 2022, as it began incurring losses for the first time in 107 years. These losses have put taxpayers on the hook, necessitating the need for them to indirectly cover the Fed’s financial deficits. It also risks the Fed’s credibility since its monetary policy impacts its profits and losses.
The Federal Reserve’s Quasi-Fiscal Deficit
The Federal Reserve’s Quasi-Fiscal Deficit
The Federal Reserve’s Quasi-Fiscal Deficit
In my latest Sound Money Project column, I talk about the issue of central banks’ deficits, a problem well-known in my home country: Argentina. A situation that is now facing the Fed. The Federal Reserve faced an unprecedented challenge in September 2022, as it began incurring losses for the first time in 107 years. These losses have put taxpayers on the hook, necessitating the need for them to indirectly cover the Fed’s financial deficits. It also risks the Fed’s credibility since its monetary policy impacts its profits and losses.