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jeff's avatar

The dual mandate is impossible, maximum employment and stable prices don't naturally occur together. So the fed has to pick one and its not stable prices. From their actions, they want higher inflation but without higher borrowing costs. So they are holding treasury yields by taking them as collateral at the very maximum value, and the point of this is to make selling them pointless. Effectively its a disguised sale that doesn't affect yields. I mean I can take cash from the Fed for my treasuries, -buy my inflation hedge-, and after the -transitory- period has finished redeem my treasury. This is all yield control and its the sop for the financial markets which could move yields. The real loss it to savers and it always will be that. This means the dollar should weaken but it isn't .. or maybe just not so far.

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