Fisher has been a strong advocate that the Fed must avoid the perception that the Fed is monetizing the US debt.
On a recent trip to China Fisher says he was asked about the Fed’s bond buying over 100 times. As long as they limit their purchases to small amounts, they can credibly avoid that label, but if they keep it up, the charge will stick.
The Fed has so far announced they will buy $300 bln in Treasuries. With $11.3 trln in outstanding public debt, the $300 bln is a rounding error. If the Fed were to buy “significant” quantities of Treasuries, then they would be guity as charged. I’ll guess “significant starts at $1 trln” , though others may disagree.
EUR/USD has fallen back to 1.4070 after a foray to a fresh session high at 1.4118 in thin afternoon trade.
