Comments from Fed vice-chair Stanley Fischer
- Estimates say large Fed balance sheet holding down 10-year yields by 110 bps and reducing unemployment by 1.25 percentage points
- Large balance sheet poses problems normalizing policy but Fed tests have been generally successful
Those estimates are fanciful at best. If US 10s were 110 bps higher, they would be at 3.11%. In Australia, with no QE and with overnight rates at 2.25%, ten year yields are at 2.46%.
